ck0001872253-20231231
CROMWELL CENTERSQUARE REAL
ESTATE FUND
Investor
Class (MRESX)
Institutional
Class (MRASX)
CROMWELL MARKETFIELD L/S
FUND
Investor
Class (MFADX)
Institutional
Class (MFLDX)
CROMWELL TRAN SUSTAINABLE
FOCUS FUND
Investor
Class (LIMAX)
Institutional
Class (LIMIX)
CROMWELL FORESIGHT GLOBAL
SUSTAINABLE INFRASTRUCTURE FUND
Investor
Class (CFGVX)*
Institutional
Class (CFGIX)
CROMWELL GREENSPRING MID
CAP FUND
Investor
Class (GRNPX)*
Institutional
Class (GRSPX)
Prospectus
April 30,
2024
The
U.S. Securities and Exchange Commission (the “SEC”) has not approved or
disapproved these securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
*
Investor Class shares of the Cromwell Foresight Global Sustainable
Infrastructure Fund and Cromwell Greenspring Mid Cap Fund are not currently
available for sale.
TABLE
OF CONTENTS
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MANAGER-OF-MANAGERS
ARRANGEMENT |
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THE
SUB-ADVISERS |
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DISTRIBUTION
AND SHAREHOLDER SERVICE (RULE 12B-1) PLAN |
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DERIVATIVE
ACTIONS |
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INDEX
DESCRIPTIONS |
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SUMMARY
SECTIONS
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Cromwell
CenterSquare Real Estate Fund |
Investment
Objective
The
Cromwell CenterSquare Real Estate Fund’s (the “CenterSquare Fund” or the “Fund”)
investment objective is to achieve a combination of income and long-term capital
appreciation.
Fees and Expenses of the
Fund
This
table describes the fees and expenses that you may pay if you buy, hold and sell
shares of the Fund. You may pay other fees, such as brokerage commissions and other fees
to financial intermediaries, which are not reflected in the table and examples
below.
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Shareholder
Fees (fees
paid directly from your investment) |
Investor
Class |
Institutional
Class |
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| None |
None |
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Annual
Fund Operating Expenses (expenses
that you pay each year as a percentage of the value of your
investment) |
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Management
Fees |
0.60% |
0.60% |
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Distribution
and Service (12b-1) Fees |
None |
None |
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Shareholder
Servicing Fee (if applicable) |
0.25% |
0.15% |
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Other
Expenses |
0.27% |
0.28% |
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Total
Annual Fund Operating Expenses |
1.12% |
1.03% |
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Less:
Fee Waiver and/or Expense Reimbursement |
0.00% |
-0.01% |
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Total
Annual Fund Operating Expenses After Fee Waiver and/or Expense
Reimbursement(1) |
1.12% |
1.02% |
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(1)
Pursuant
to an operating expense limitation agreement, Cromwell Investment Advisors, LLC,
the Fund’s investment adviser (the “Adviser”), has agreed to waive its
management fees and/or reimburse Fund expenses to ensure that Total Annual Fund
Operating Expenses (exclusive of contingent deferred sales loads, taxes,
leverage, interest, brokerage commissions, expenses incurred in connection with
any merger or reorganization, dividends or interest expenses on short positions,
acquired fund fees and expenses, and extraordinary expenses) do not exceed 1.12%
and 1.02% of the Fund’s average daily net assets for Investor Class shares and
Institutional Class shares, respectively, through at least April 30, 2025 (“Expense
Caps”).
The operating expense limitation agreement can be terminated only by, or with
the consent of, the Trust’s Board of Trustees (the “Board of Trustees”). The
Adviser may request recoupment of previously waived fees and paid expenses from
the Fund for up to 36 months from the date such fees and expenses were
waived or paid, subject to the operating expense limitation agreement, if such
reimbursement will not cause the Fund’s expense ratio, after recoupment has been
taken into account, to exceed the lesser of: (1) the expense limitation in
place at the time of the waiver and/or expense payment; or (2) the expense
limitation in place at the time of the recoupment.
Example
This
example is intended to help you compare the costs of investing in the Fund with
the cost of investing in other mutual funds. The example assumes that you invest
$10,000 in the Fund for the time periods indicated and that you then redeem or
hold all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year and that the Fund’s operating
expenses remain the same
(taking into account the Expense Cap only in the first
year).
Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:
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| One
Year |
Three
Years |
Five
Years |
Ten
Years |
Investor
Class |
$114 |
$356 |
$617 |
$1,363 |
Institutional
Class |
$104 |
$327 |
$568 |
$1,259 |
Summary
Section 1 Cromwell
CenterSquare Real Estate Fund
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
shares are held in a taxable account. These transaction costs and potentially
higher taxes, which are not reflected in the Total Annual Fund Operating
Expenses or in the example, affect the Fund’s performance. During
the fiscal year ended
December 31, 2023,
the portfolio turnover rate of the Fund was 47% of the average value of its
portfolio.
Principal Investment
Strategies
Under normal
circumstances, the Fund will invest at least 80% of its net assets, plus the
amount of any borrowings for investment purposes, in stocks of companies
principally engaged in the real estate industry, including Real Estate
Investment Trusts (“REITs”).
For
purposes of the Fund’s investment policies, CenterSquare Investment Management
LLC (“CenterSquare Sub-Adviser”
or “Sub-Adviser”)
considers a company to be principally engaged in the real estate industry if it
(i) derives at least 50% of its revenues or profits from the ownership,
construction, management, financing or sale of residential, commercial or
industrial real estate, or (ii) has at least 50% of its assets invested in
residential, commercial or industrial real estate. The Fund invests primarily in
REITs (mainly equity REITs), listed Real Estate Operating Companies (“REOCs”)
and equity securities of companies whose principal business is the ownership
management and/or development of income producing and for-sale real estate.
Investments will primarily be comprised of equity REITs and REOCs but may also
include hybrid and mortgage REITs.
The
Fund may invest in companies representing a broad range of market
capitalizations, which generally may include large-, mid-, and
small-capitalization companies. The Fund also may invest up to 10% of the Fund’s
assets in initial public offerings (“IPOs”) and up to 10% of the Fund’s assets
in exchange-traded funds (“ETFs”). The IPOs and ETFs in which the Fund invests
are primarily comprised of REITs or REOCs traded on U.S. exchanges.
The
Fund is non-diversified and may hold a greater percentage of its assets in
securities of a single issuer or a smaller number of issuers than a diversified
fund. The
Fund’s strategy generates high portfolio turnover.
Principal
Risks
In
addition to possibly not achieving your investment goals,
you could lose money by investing in the Fund.
An
investment in the Fund is not a deposit of the bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
The
principal risks of investing in the Fund are:
•Real
Estate Industry Risk.
Investments in the Fund may be subject to many of the same risks as a
direct investment in real estate. The stock prices of companies in the real
estate industry, including REITs, are typically sensitive to changes in real
estate values, property taxes, interest rates, cash flow of underlying real
estate assets, occupancy rates, government regulations affecting zoning, land
use, and rents, as well as the management skill and creditworthiness of the
issuer. REITs also depend generally on their ability to generate cash flow to
make distributions to shareholders or unitholders and are subject to the risk of
failing to qualify for favorable tax treatment under the Internal Revenue Code
of 1986, as amended (the “Internal Revenue Code”).
Summary
Section 1 Cromwell
CenterSquare Real Estate Fund
•Non-Diversified
Fund Risk. The
Fund is non-diversified and therefore a greater percentage of holdings may be
focused in a small number of issuers or a single issuer, which can place the
Fund at greater risk. Notwithstanding the Fund’s status as a “non-diversified”
investment company under the Investment Company Act of 1940, as amended (the
“1940 Act”), the Fund intends to qualify as a regulated investment company
accorded special tax treatment under the Internal Revenue Code, which imposes
its own diversification requirements that are less restrictive than the
requirements applicable to “diversified” investment companies under the 1940
Act.
•IPO
Risk. The prices of stocks purchased in initial public offerings (“IPOs”)
can be very volatile and tend to fluctuate more widely than stocks of companies
that have been publicly traded for a longer period of time. The effect of IPOs
on the Fund’s performance depends on a variety of factors.
•Market
Changes Risk. The value of the Fund’s investments may change because of broad
changes in the markets in which the Fund invests, which could cause the Fund to
underperform other funds with similar objectives. From time to time, markets may
experience periods of acute stress that may result in increased volatility and
increased redemptions. Such conditions may add significantly to the risk of
volatility in the net asset value (“NAV”) of the Fund’s
shares.
•Recent
Market Events Risk. U.S. and international markets have experienced significant periods
of volatility in recent months and years due to a number of economic, political
and global macro factors including rising inflation, the possibility of a
national or global recession, the war between Russia and Ukraine, and the
conflict between Israel and Hamas. Inflation and rapid fluctuations in inflation
rates may have negative effects on the economies and securities markets of the
United States and other countries. Pandemics and epidemics have been and can be
highly disruptive to economies and markets, adversely impacting individual
companies, sectors, industries, markets, currencies, interest and inflation
rates, credit ratings, investor sentiment, and other factors affecting the value
of the Funds’ investments. The ongoing armed conflict between Ukraine and Russia
in Europe and Israel and Hamas in the Middle East could have severe adverse
effects on the regional or global economies and the markets for certain
securities.
•Management
Risk.
Because the Fund is an actively managed investment portfolio, security selection
or focus on securities in a particular style, market sector or group of
companies may cause the Fund to incur losses or underperform relative to its
benchmarks or other funds with a similar investment objective. There can be no
guarantee that the Sub-Adviser’s
investment techniques and risk analysis will produce the desired
result.
•Changing
Distribution Level Risk. The Fund will normally receive income which may include interest,
dividends and/or capital gains, depending upon its investments. The distribution
amount paid by the Fund will vary and generally depends on the amount of income
the Fund earns (less expenses) on its portfolio holdings, and capital gains or
losses it recognizes. A decline in the Fund’s income or net capital gains
arising from its investments may reduce its distribution
level.
•Equity
Securities Risk. Investments
in common stocks and other equity securities are particularly subject to the
risk of changing economic, stock market, industry and company conditions and the
risks inherent in a portfolio manager’s ability to anticipate such changes that
can adversely affect the value of the Fund’s
holdings.
•Large-Capitalization
Stock Risk. Larger,
more established companies may be unable to respond quickly to new competitive
challenges such as changes in consumer tastes or innovative smaller
Summary
Section 2 Cromwell
CenterSquare Real Estate Fund
competitors. Also, large-capitalization companies are sometimes unable
to attain the high growth rates of successful, smaller companies, especially
during extended periods of economic expansion.
•Small-
and Mid-Capitalization Stock Risk. Stocks of mid-cap companies may be subject to greater price
volatility, significantly lower trading volumes, cyclical, static or moderate
growth prospects and greater spreads between their bid and ask prices than
stocks of larger companies. Because these businesses frequently rely on narrower
product lines and niche markets, they can suffer isolated
setbacks.
•High
Portfolio Turnover Rate Risk. The Fund may have a relatively high turnover rate compared to many
mutual funds. A high portfolio turnover rate (100% or more) has the potential to
result in increased brokerage transaction costs and higher taxes which may lower
the Fund’s returns.
•Exchange-Traded
Fund Risk.
The risks of owning an ETF generally reflect the risks of owning the underlying
securities they are designed to track, although lack of liquidity in an ETF
could result in it being more volatile than the underlying portfolio of
securities. Disruptions in the markets for the securities underlying ETFs
purchased or sold by the Fund could result in losses on the Fund’s investment in
ETFs. ETFs also have management fees that increase their costs versus the costs
of owning the underlying securities directly. The Fund may purchase shares of
ETFs at prices that exceed the net asset value of their underlying investments
(i.e., premium)
and may sell shares of ETFs at prices below such net asset value (i.e., discount), and the Fund will likely incur brokerage costs when
it purchases and sells ETFs. Due to the costs of buying or selling shares,
including brokerage commissions imposed by brokers and bid-ask spreads, frequent
trading of shares may significantly reduce investment results and an investment
in shares may not be advisable for investors who anticipate regularly making
small investments. Additionally, supply and demand for shares of an ETF or
market disruptions may cause the market price of the ETF to deviate from the
value of the ETF’s investments, which may lead to widening of the bid-ask spread
quoted throughout the day and may be exacerbated in less liquid or volatile
markets.
•Cybersecurity
Risk.
With the increased use of technologies such as the Internet to conduct business,
the Fund and the Sub-Adviser are susceptible to operational, information
security, and related risks. Cyber incidents affecting the Fund, the
Sub-Adviser, or the Fund’s service providers may cause disruptions and impact
business operations, potentially resulting in financial losses, interference
with the Fund’s ability to calculate its NAV, impediments to trading, the
inability of shareholders to transact business, violations of applicable privacy
and other laws, regulatory fines, penalties, reputational damage, reimbursement
or other compensation costs, or additional compliance
costs.
•Market
Disruption Risks Related to Armed Conflict. As a result of increasingly interconnected global economies and
financial markets, armed conflict between countries or in a geographic region,
for example the current conflicts between Russia and Ukraine in Europe and Hamas
and Israel in the Middle East, has the potential to adversely impact a Fund’s
investments. Such conflicts, and other corresponding events, have had, and could
continue to have, severe negative effects on regional and global economic and
financial markets, including increased volatility, reduced liquidity, and
overall uncertainty, which may result in a negative impact on Fund performance
and the value of an investment in the Fund.
Performance
Effective
on March 7, 2022,
AMG
Managers CenterSquare Real Estate Fund, a series of AMG Funds I (the
“Predecessor Fund”), reorganized into the Fund (the “Reorganization”).
Performance information
Summary
Section 3 Cromwell
CenterSquare Real Estate Fund
shown
prior to March 7, 2022, is that of the Predecessor Fund. Accordingly, the
returns for Investor Class shares in the bar chart and table prior to
March 7, 2022, are the returns of the Predecessor Fund’s Class N
shares. Returns of the Investor Class and Institutional Class shares shown in
the table prior to March 7, 2022, reflect the returns of Classes N and
I, respectively, of the Predecessor Fund. Additionally, the Fund has adopted the
Financial Statements of the Predecessor Fund.
Prior
to February 27, 2017, outstanding Class S shares of the Predecessor
Fund (formerly the Predecessor Fund’s sole share class, which was reclassified
and redesignated as Class S on October 1, 2016) were renamed
Class N shares. Class Z shares were closed effective February 28,
2023
and converted to Institutional Class shares.
To
obtain updated performance information, please visit the Fund’s website at
www.thecromwellfunds.com
or call the Fund at 1-855-625-7333
(toll free).
Calendar
Year Total Return
for
Investor Class Shares as of December 31
Best
Quarter: 18.16% (Quarter ended
December 31,
2023)
Worst
Quarter: -21.14% (Quarter ended March 31,
2020)
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Average
Annual Total Returns
(for
the Periods Ended December 31, 2023) |
1
Year |
5
Year |
10
Years |
Since
Inception of Institutional Class (02/24/2017) |
Investor
Class |
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Return Before
Taxes |
11.70% |
7.01% |
7.53% |
N/A |
Return After
Taxes on Distributions |
10.90% |
5.83% |
5.70% |
N/A |
Return After
Taxes on Distributions and Sale of Fund Shares |
7.04% |
5.25% |
5.48% |
N/A |
Institutional
Class |
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Return Before
Taxes |
11.71% |
7.13% |
N/A |
4.70% |
FTSE
Nareit All Equity REITs Total Return Index
(reflects no deduction for fees, expenses or
taxes) |
11.36% |
7.59% |
7.95% |
5.50% |
S&P
500®
Index
(reflects no deduction for fees, expenses or
taxes) |
26.29% |
15.69% |
12.03% |
12.75% |
Summary
Section 4 Cromwell
CenterSquare Real Estate Fund
After-tax returns are calculated using the highest historical
individual federal marginal income tax rates and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on your
tax situation and may differ from those shown. Furthermore,
the after-tax returns shown are not relevant to shareholders who hold their
shares through tax-deferred or other tax-advantaged arrangements, such as 401(k)
plans or individual retirement accounts (“IRAs”). After-tax returns are shown for the Investor Class shares only
and after-tax returns for the other classes will
vary.
Management
The
Adviser
Cromwell
Investment Advisors, LLC is the Fund’s investment adviser.
The
Sub-Adviser
CenterSquare
Investment Management LLC
is the Fund’s sub-adviser.
Portfolio
Managers
The
following portfolio managers are jointly and primarily responsible for the
day-to-day management of the Fund:
Dean
Frankel, CFA®
Managing
Director, Head of Real Estate Securities, CenterSquare Sub-Adviser;
Portfolio
Manager of the Fund and the Predecessor Fund since March 2004.
Eric
Rothman, CFA®
Portfolio
Manager, CenterSquare Sub-Adviser;
Portfolio
Manager of the Fund and the Predecessor Fund since November 2006.
Purchase
and Sale of Fund Shares
You
may purchase or redeem shares by mail addressed to Cromwell
CenterSquare Real Estate Fund,
c/o U.S. Bank Global Fund Services, P.O. Box 701, Milwaukee, Wisconsin
53201-0701, by telephone at 1-855-625-7333 (toll free), on any day the New York
Stock Exchange (“NYSE”) is open for trading, or through a broker-dealer or other
financial intermediary (such as a bank) approved by the Fund (an “Authorized
Intermediary”). You may also purchase or redeem Fund shares by wire transfer.
Purchases and redemptions by telephone are permitted if you have previously
established these options for your account. Investors who wish to purchase or
redeem Fund shares through an Authorized Intermediary should contact the
Authorized Intermediary directly.
Minimum
Investment Amounts
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Initial
Investment |
Subsequent
Investments |
Investor
Class |
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Regular
Accounts |
$2,000 |
$100 |
Individual
Retirement Accounts |
$1,000 |
$100 |
Institutional
Class |
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Regular
Accounts |
$100,000 |
$100 |
Individual
Retirement Accounts |
$25,000 |
$100 |
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Summary
Section 5 Cromwell
CenterSquare Real Estate Fund
Tax
Information
The
Fund’s distributions may be taxed as ordinary income unless you are investing
through a tax-deferred or other tax-advantaged arrangement, such as a 401(k)
plan or an IRA. A portion of the Fund’s distributions may also be taxable as
long-term capital gain. You may be taxed later upon withdrawal of monies from
such tax-deferred or other tax-advantaged arrangements.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase Fund shares through a broker-dealer or other financial intermediary
(such as a bank), the Fund and its related companies may pay the intermediary
for the sale of Fund shares and related services. These payments may create
conflicts of interest by influencing the broker-dealer or other intermediary and
your financial professional to recommend the Fund over another investment. Ask
your financial professional or visit your financial intermediary’s website for
more information.
Summary
Section 6 Cromwell
CenterSquare Real Estate Fund
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Cromwell
Marketfield L/S Fund |
Investment
Objective
The
investment objective of the Cromwell Marketfield L/S Fund (the “Marketfield
Fund” or the “Fund”) is capital appreciation.
Fees and Expenses of the
Fund
This
table describes the fees and expenses that you may pay if you buy, hold and sell
shares of the Fund. You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and examples
below.
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Shareholder
Fees (fees
paid directly from your investment) |
Investor
Class |
Institutional
Class |
| None |
None |
Annual
Fund Operating Expenses (expenses
that you pay each year as a percentage of the value of your
investment) |
Management
Fees |
1.40% |
1.40% |
Distribution
and/or Service (12b-1) Fees |
0.25% |
None |
Other
Expenses |
| |
Short
Sale Expenses |
0.58% |
0.58% |
Remainder
of Other Expenses |
0.37% |
0.37% |
Acquired
Fund Fees and Expenses |
0.04% |
0.04% |
Total
Annual Fund Operating Expenses(1) |
2.64% |
2.39% |
Less:
Fee Waiver and/or Expense Reimbursement |
-0.22% |
-0.22% |
Total
Annual Fund Operating Expenses After Fee Waiver and/or Expense
Reimbursement (1)(2) |
2.42% |
2.17% |
(1)Total Annual Fund Operating Expenses do not correlate to the
Ratio of Expenses to Average Net Assets found within the “Financial Highlights”
section of this Prospectus, because Acquired Fund Fees and Expenses are not
included in the ratio.
(2)Pursuant
to an operating expense limitation agreement, Cromwell Investment Advisors, LLC,
the Fund’s investment adviser (the “Adviser”), has agreed to waive its
management fees and/or reimburse Fund expenses to ensure that Total Annual Fund
Operating Expenses (exclusive of contingent deferred sales loads, taxes,
leverage, interest, brokerage commissions, expenses incurred in connection with
any merger or reorganization, dividends or interest expenses on short positions,
acquired fund fees and expenses, and extraordinary expenses) do not exceed 1.80%
and 1.55% of the Fund’s average daily net assets for Investor Class shares and
Institutional Class shares, respectively, through at least April 30, 2025 (“Expense
Caps”). The operating expense limitation agreement can be terminated only by, or
with the consent of, the Trust’s Board of Trustees (the “Board of Trustees”).
The Adviser may request recoupment of previously waived fees and paid expenses
from the Fund for up to 36 months from the date such fees and expenses were
waived or paid, subject to the operating expense limitation agreement, if such
reimbursement will not cause the Fund’s expense ratio, after recoupment has been
taken into account, to exceed the lesser of: (1) the expense limitation in
place at the time of the waiver and/or expense payment; or (2) the expense
limitation in place at the time of the recoupment. Notwithstanding the
foregoing, to the extent the Marketfield Sub-Adviser waived fees or paid
expenses for the predecessor Fund, the Board has determined it appropriate and
pursuant to the Agreement and Plan of Reorganization, the Marketfield
Sub-Adviser may recoup any such fees and expenses for up to 36 months from
the date such fees and expenses were waived or paid on behalf of the predecessor
Fund prior to the Reorganization.
Example
This
example is intended to help you compare the costs of investing in the Fund with
the cost of investing in other mutual funds. The example assumes that you invest
$10,000 in the Fund for the time periods indicated and that you then redeem or
hold all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year and that the Fund’s operating
expenses remain the same (taking into account the Expense Cap only in the first
year). Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
Summary
Section 7 Cromwell Marketfield L/S
Fund
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| One
Year |
Three
Years |
Five
Years |
Ten
Years |
Investor
Class |
$245 |
$800 |
$1,381 |
$2,957 |
Institutional
Class |
$220 |
$725 |
$1,256 |
$2,710 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
shares are held in a taxable account. These transaction costs and potentially
higher taxes, which are not reflected in the Total Annual Fund Operating
Expenses or in the example, affect the Fund’s performance. During
the fiscal year ended
December 31, 2023,
the portfolio turnover rate of the Fund was 30%
of the average value of its portfolio.
Principal Investment
Strategies
The
Fund seeks capital appreciation while trying to achieve volatility generally
lower than that of the broad equity market. Correlation between the Fund and the
broad equity market may vary considerably over the course of time.
To
achieve the Fund’s investment objective, Marketfield Asset Management LLC, the
investment sub-adviser (the “Marketfield Sub-Adviser”
or “Sub-Adviser”),
employs a long/short strategy and allocates the Fund’s assets by primarily
investing in equity securities and exchange-traded funds (ETFs), while also
investing in fixed-income securities and other investment companies in
proportions consistent with the Marketfield Sub-Adviser’s evaluation of their
expected risks and returns. The Fund intends to maintain a net long exposure
(the market value of long positions minus the market value of short positions)
of approximately 25% to 80% of its net assets. Under normal market conditions,
the Fund’s long positions may range from approximately 60% to 95% of its net
assets and its short positions may range from approximately 10% to 50% of its
net assets.
The
Sub-Adviser
notes that fixed income securities could potentially provide a source of
positive returns during an equity market correction. Additionally, they may
provide a specific opportunity during periods that the market’s perception is
changing rapidly, and provide superior risk adjusted return opportunities to
equity exposure (e.g., the
aftermath of the Financial Crisis in 2009 and the Euro crisis in 2012). During
times of rapidly rising interest rates or widening credit spreads the
implementation of short positions in fixed income may also generate positive
returns. It should be noted that due to the lower historic volatility of fixed
income compared to equities, the Adviser would typically take a larger position
to generate a similar portfolio response.
The
Sub-Adviser utilizes its own macro-economic and technical market research to
construct the Fund’s portfolio. Generally, long positions are increased during
periods in which the Sub-Adviser’s research shows a likelihood of future growth
in selected securities, and reduced when the opposite is true. Short positions
are utilized both as hedges and to capture specific risks either in the broad
equity market or specific portions of the market. The Sub-Adviser generally uses
a combination of common stocks and ETFs to generate exposure, with the latter
being used to efficiently capture broader exposure either at the sector or
geographic (country) level. The Sub-Adviser analyzes the market to determine
when allocations to fixed-income securities are appropriate.
The
Fund’s equity securities investments may include common and preferred stocks of
United States companies of any size. The Fund may take long and short positions
in equity securities of foreign companies of any size, including securities
issued by corporations located in developing or emerging
Summary
Section 8 Cromwell Marketfield L/S
Fund
markets.
The amount of Fund assets invested in foreign securities may vary based on
market conditions. However, under normal market
conditions, the Sub-Adviser expects the Fund may invest up to 50% of the Fund’s net assets in
foreign securities, including securities of issuers located in emerging
markets. The
Sub-Adviser determines
the countries considered to be emerging market countries by taking into
consideration factors such as the development of a country’s financial and
capital markets, inclusion of a country in an index representative of emerging
markets, and country classifications used by the World Bank, International
Monetary Fund or United Nations. The Fund’s investments in foreign securities
may include, but are not limited to, American Depositary Receipts (“ADRs”),
European Depositary Receipts (“EDRs”) and Global Depositary Receipts (“GDRs”).
The Fund’s investments in other investment companies, including ETFs, and
derivative type transactions will be considered “foreign” if the underlying
assets represented by the investment are determined to have exposure to foreign
securities, including emerging market securities.
The
Fund will engage in short sales of securities or other derivative type
transactions for hedging purposes to profit from an anticipated decline in the
price of the securities sold short. For speculation purposes, the Fund may also
enter into options, forward contracts, forward foreign currency contracts in
positions that it expects to appreciate or decline without regard to other
positions in the portfolio.
In
addition, the Fund may invest up to 50% of its net assets in equity or
fixed-income options, futures contracts and convertible securities and may
invest up to 30% of its net assets in interest rate, credit default, index,
equity (including total return), and currency exchange rate swap agreements. The
Fund may use derivatives either when they offer more attractive risk/rewards
than an outright “long” or “short” position. This typically is the case with
single name equity securities, ETFs or index options. The Fund may also use
derivatives if the instrument is generally only traded in a derivative format,
such as certificates of deposit or foreign exchanges. The
Sub-Adviser
shall manage the Fund so that the Fund will not be deemed to be a “commodity
pool” under the Commodity Exchange Act.
Under
normal market conditions, the Fund’s investments in fixed-income securities
which may be of any maturation or duration, consist of investment grade
corporate bonds and debentures, mortgage-backed and asset-backed securities,
United States Treasury obligations, obligations issued by the U.S. Government
and its agencies or instrumentalities and convertible securities. The Fund may
also invest in fixed income securities of foreign issuers and governments
(including issuers in emerging markets). The Fund may invest up to 30% of its
net assets in fixed-income securities that are below investment grade. Below
investment grade securities are generally securities that receive low ratings
from independent rating agencies, such as securities rated lower than BBB- by
Standard & Poor’s Ratings Services (“S&P”) and Baa3 by Moody’s Investors
Service, Inc. (“Moody’s”), or if unrated, are determined to be of equivalent
quality by the
Sub-Adviser.
If independent rating agencies assign different ratings to the same security,
the Fund will use the higher rating for purposes of determining the security’s
credit quality. These investments may include securities of varying maturities,
durations and ratings, including securities that have been rated below
investment grade by an independent rating agency, commonly referred to as “junk
bonds” or “high yield bonds.” Securities that are rated below investment grade
by an independent rating agency are commonly referred to as “high yield debt” or
“junk bonds.”
When
reviewing investment opportunities for the Fund, the
Sub-Adviser
considers various factors, including macroeconomic conditions, corporate
earnings at a macroeconomic level, anticipated inflation and interest rates,
consumer risk and its perception of the outlook of the capital markets as a
whole. A macroeconomic strategy focuses on broad trends and is generally
distinguished from a strategy that focuses on the prospects of particular
companies or issuers. The
Sub-Adviser
may allocate the Fund’s investments between equity and fixed-income securities
at its discretion, without limitation.
Summary
Section 9 Cromwell Marketfield L/S
Fund
Security
selection for the Fund is driven by the Sub-Adviser’s top-down analysis of
economic issues, the Sub-Adviser’s perception of investor sentiment and
investment flows. Once the Sub-Adviser has identified a theme that is expected
to either benefit or disadvantage a specific sector or country, it seeks to
implement an investment strategy that is appropriate for the Fund. In some
cases, the Sub-Adviser may utilize a sector- or country-specific ETF that offers
exposure to a broad range of securities. In other situations, the Sub-Adviser
may select a single issue that is perceived by the Sub-Adviser to be
particularly germane to a specific concern or a small group of issues with
characteristics that match the goal of creating portfolio exposure to a
macroeconomic theme. The Sub-Adviser may select growth stocks or value stocks
and may choose to invest in real estate investment trusts (REITs) as it deems
appropriate.
The
Sub-Adviser
may sell a security if it no longer believes the security will contribute to
meeting the investment objective of the Fund or when the security is deemed less
attractive relative to another security on a return/risk basis. The
Sub-Adviser may also sell or reduce a position in a security if it sees the
investment theme failing to materialize.
Principal Risks
In
addition to possibly not achieving your investment goals,
you could lose money by investing in the Fund.
An
investment in the Fund is not a deposit of the bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
The
principal risks of investing in the Fund are:
•Market
Changes Risk. The value of the Fund’s investments may change because of broad
changes in the markets in which the Fund invests, which could cause the Fund to
underperform other funds with similar objectives. From time to time, markets may
experience periods of acute stress that may result in increased volatility and
increased redemptions. Such conditions may add significantly to the risk of
volatility in the net asset value (“NAV”) of the Fund’s
shares.
•Recent
Market Events Risk. U.S. and international markets have experienced significant periods
of volatility in recent months and years due to a number of economic, political
and global macro factors including rising inflation, the possibility of a
national or global recession, the war between Russia and Ukraine, and the
conflict between Israel and Hamas. Inflation and rapid fluctuations in inflation
rates may have negative effects on the economies and securities markets of the
United States and other countries. Pandemics and epidemics have been and can be
highly disruptive to economies and markets, adversely impacting individual
companies, sectors, industries, markets, currencies, interest and inflation
rates, credit ratings, investor sentiment, and other factors affecting the value
of the Funds’ investments. The ongoing armed conflict between Ukraine and Russia
in Europe and Israel and Hamas in the Middle East could have severe adverse
effects on the regional or global economies and the markets for certain
securities.
•Management
Risk. Because the Fund is an actively managed investment portfolio,
security selection or focus on securities in a particular style, market sector
or group of companies may cause the Fund to incur losses or underperform
relative to its benchmarks or other funds with a similar investment objective.
There can be no guarantee that the Sub-Adviser’s investment techniques and risk
analysis will produce the desired result.
•Macroeconomic
Strategy Risk.
The investment strategies of the Fund rely on, among other things, the
Sub-Adviser’s assessment of macroeconomic conditions and trends across multiple
geographies and
Summary
Section 10 Cromwell Marketfield
L/S Fund
asset classes. As such, the success of the investment strategies of
the Fund depends, in part, on the accuracy of the Sub-Adviser’s assessment of
macroeconomic conditions and trends. Macroeconomic conditions may include, among
others, unanticipated changes in economic and political conditions, corporate
profits and other business related indicators, inflation and interest rate
levels and performance of broad markets across asset classes.
•Equity
Securities Risk. Investments in common stocks and other equity securities are
particularly subject to the risk of changing economic, stock market, industry
and company conditions and the risks inherent in a portfolio manager’s ability
to anticipate such changes that can adversely affect the value of the Fund’s
holdings.
•Short
Selling Risk.
If a security sold short increases in price, the Fund may have to cover its
short position at a higher price than the short sale price, resulting in a loss.
Because losses on short sales arise from increases in the value of the security
sold short, such losses are theoretically unlimited. The Fund also may be
required to pay a premium and other transaction costs, which would increase the
cost of the security sold short. The amount of any gain will be decreased, and
the amount of any loss increased, by the amount of the premium, dividends,
interest or expenses the Fund may be required to pay in connection with the
short sale.
By investing the proceeds received from selling securities short, the
Fund could be deemed to be employing a form of leverage, which creates special
risks. The use of leverage may increase the Fund’s exposure to long positions
and make any change in the Fund’s NAV greater than it would be without the use
of leverage. This could result in increased volatility of
returns.
•Convertible
Securities Risk. Convertible securities may be subordinate to other securities. In
part, the total return for a convertible security depends upon the performance
of the underlying stock into which it can be converted. Also, issuers of
convertible securities are often not as strong financially as those issuing
securities with higher credit ratings, are more likely to encounter financial
difficulties and typically are more vulnerable to changes in the economy, such
as a recession or a sustained period of rising interest rates, which could
affect their ability to make interest and principal payments. If an issuer stops
making interest and/or principal payments, the Fund could lose its entire
investment.
•Foreign
Securities Risk. Investments in foreign securities may be riskier than investments in
U.S. securities. Differences between U.S. and foreign regulatory regimes and
securities markets, including less stringent investor protections and disclosure
standards of some foreign markets, less liquid trading markets and political and
economic developments in foreign countries, may affect the value of the Fund’s
investments in foreign securities. Foreign securities may also subject the
Fund’s investments to changes in currency rates.
•Emerging
Markets Risk.
The risks related to investing in foreign securities are generally greater with
respect to securities of companies that conduct their business activities in
emerging markets or whose securities are traded principally in emerging markets.
The risks of investing in emerging markets include the risks of illiquidity,
increased price volatility, smaller market capitalizations, less government
regulation, less extensive and less frequent accounting, financial and other
reporting requirements, risk of loss resulting from problems in share
registration and custody, substantial economic and political disruptions and the
nationalization of foreign deposits or assets. Emerging markets have differences
in regulatory, accounting, auditing, and financial reporting and recordkeeping
standards which could impede the Sub-Adviser’s
ability to evaluate local companies, or impact the Fund’s performance. Within
Emerging Markets, rights and remedies available to the
Summary
Section 11 Cromwell Marketfield
L/S Fund
Fund,
individually or in combination with other shareholders against portfolio
companies could be limited severely.
•Small-
and Mid-Capitalization Stock Risk. Stocks of mid-cap companies may be subject to greater price
volatility, significantly lower trading volumes, cyclical, static or moderate
growth prospects and greater spreads between their bid and ask prices than
stocks of larger companies. Because these businesses frequently rely on narrower
product lines and niche markets, they can suffer isolated
setbacks.
•Large-Capitalization
Stock Risk. Larger, more established companies may be unable to respond quickly
to new competitive challenges such as changes in consumer tastes or innovative
smaller competitors. Also, large-capitalization companies are sometimes unable
to attain the high growth rates of successful, smaller companies, especially
during extended periods of economic expansion.
•Depositary
Receipts Risk. Investments in depositary receipts may entail the special risks of
foreign investing, including currency exchange fluctuations, government
regulations, and the potential for political and economic
instability.
•Debt
or Fixed-Income Securities Risk.
The risks of investing in debt or fixed-income securities include (without
limitation): (1) credit risk, i.e.,
the issuer may not repay the loan created by the issuance of that debt security;
(2) maturity risk, i.e.,
a debt security with a longer maturity may fluctuate in value more than one with
a shorter maturity; (3) market risk, i.e.,
low demand for debt securities may negatively impact their price;
(4) interest rate risk, i.e.,
when interest rates go up, the value of a debt security goes down, and when
interest rates go down, the value of a debt security goes up (long-term debt
securities will normally have more price volatility than short-term debt
securities because long-term debt securities are generally more susceptible to
interest rate risk than short-term debt securities); (5) selection risk,
i.e.,
the securities selected by the Sub-Adviser may underperform the market or other
securities selected by other funds; and (6) call risk, i.e.,
during a period of falling interest rates, the issuer may redeem a security by
repaying it early, which may reduce the Fund’s income if the proceeds are
reinvested at lower interest rates.
Rising
interest rates or lack of market participants may lead to decreased liquidity in
the bond markets, making it more difficult for the Sub-Adviser to sell a bond.
Decreased liquidity in the markets also may make it more difficult to value some
or all of the Fund’s holdings.
Additional
risks associated with an investment in the Fund include the following:
(1) not all U.S. government securities are insured or guaranteed by the
U.S. government—some are backed only by the issuing agency, which must rely on
its own resources to repay the debt; and (2) the Fund’s yield will
fluctuate with changes in short-term interest
rates.
•U.S.
Treasury Obligations Risk.
U.S. Treasury obligations may differ from other securities in their interest
rates, maturities, times of issuance and other characteristics and may provide
relatively lower returns than those of other securities. Similar to other
issuers, changes to the financial condition or credit rating of the U.S.
government may cause the value of the Fund’s U.S. Treasury obligations to
decline.
•U.S.
Government Securities Risk.
Certain U.S. government securities are backed by the right of the issuer to
borrow from the U.S. Treasury while others are supported only by the credit of
the issuer or instrumentality. While the U.S. government is able to provide
financial support to U.S. government-
Summary
Section 12 Cromwell Marketfield
L/S Fund
sponsored
agencies or instrumentalities, no assurance can be given that it will always do
so. Such securities are generally neither issued nor guaranteed by the U.S.
Treasury.
•High-Yield
Securities Risk. Investments in high-yield securities or
non-investment grade securities (commonly referred to as “junk bonds”) are
sometimes considered speculative because they present a greater risk of loss
than higher quality securities. Such securities may, under certain
circumstances, be less liquid than higher rated securities. These securities pay
investors a premium (a high interest rate or yield) because of the increased
risk of loss. These securities can also be subject to greater price volatility.
In times of unusual or adverse market, economic or political conditions, these
securities may experience higher than normal default
rates.
•Other
Investment Companies Risk.
Investing in other investment companies subjects the Fund to those risks
affecting the investment companies themselves, including the possibility that
the value of the underlying securities held by an investment company could
decrease or an investment company’s portfolio becomes illiquid. Additionally, an
investment company may not achieve its investment objective or execute its
investment strategy effectively, which may adversely affect the Fund’s
performance. To the extent that the Fund invests in other investment companies,
investors in the Fund will bear both their proportionate share of expenses in
the Fund and, indirectly, the expenses of the investment companies in which the
Fund invests.
•Exchange-Traded
Fund Risk.
The risks of owning an ETF generally reflect the risks of owning the underlying
securities they are designed to track, although lack of liquidity in an ETF
could result in it being more volatile than the underlying portfolio of
securities. Disruptions in the markets for the securities underlying ETFs
purchased or sold by the Fund could result in losses on the Fund’s investment in
ETFs. ETFs also have management fees that increase their costs versus the costs
of owning the underlying securities directly. The Fund may purchase shares of
ETFs at prices that exceed the net asset value of their underlying investments
(i.e., premium)
and may sell shares of ETFs at prices below such net asset value (i.e., discount), and the Fund will likely incur brokerage costs when
it purchases and sells ETFs. Due to the costs of buying or selling shares,
including brokerage commissions imposed by brokers and bid-ask spreads, frequent
trading of shares may significantly reduce investment results and an investment
in shares may not be advisable for investors who anticipate regularly making
small investments. Additionally, supply and demand for shares of an ETF or
market disruptions may cause the market price of the ETF to deviate from the
value of the ETF’s investments, which may lead to widening of the bid-ask spread
quoted throughout the day and may be exacerbated in less liquid or volatile
markets.
•Mortgage-Backed/Asset-Backed
Securities Risk.
Prepayment risk is associated with mortgage-backed and asset-backed securities.
If interest rates fall, the underlying debt may be repaid ahead of schedule,
reducing the value of the Fund’s investments. If interest rates rise, there may
be fewer prepayments, which would cause the average bond maturity to rise,
increasing the potential for the Fund to lose money. The value of these
securities may be significantly affected by changes in interest rates, the
market’s perception of issuers, and the creditworthiness of the parties
involved. The ability of the Fund to successfully utilize these instruments may
depend on the ability of the Sub-Adviser to forecast interest rates and other economic factors
correctly. These securities may have a structure that makes their reaction to
interest rate changes and other factors difficult to predict, making their value
highly volatile.
•REIT
Investment Risk.
The Fund’s investments in REITs will, among other things, be subject to many of
the same risks as a direct investment in real estate. The stock prices of
companies in the real estate
Summary
Section 13 Cromwell Marketfield
L/S Fund
industry, including REITs, are typically sensitive to changes in real
estate values, property taxes, interest rates, cash flow of underlying real
estate assets, occupancy rates, government regulations affecting zoning, land
use, and rents, as well as the management skill and creditworthiness of the
issuer.
•Derivatives
Risk.
Derivatives are investments whose value depends on (or is derived from) the
value of an underlying instrument, such as a security, asset, reference rate or
index. Derivative strategies often involve leverage, which may exacerbate a
loss, potentially causing the Fund to lose more money than it would have lost
had it invested in the underlying instrument. Derivatives may be difficult to
sell, unwind or value. Derivatives may also be subject to counterparty risk,
which is the risk that the counterparty (the party on the other side of the
transaction) on a derivative transaction will be unable to honor its contractual
obligations to the Fund. Swap transactions tend to shift the Fund’s investment
exposure from one type of investment to another, and therefore entail the risk
that a party will default on its payment obligations to the Fund.
Futures may be more volatile than direct investments in the
instrument underlying the futures, and may not correlate perfectly to the
underlying instrument. Futures also may involve a small initial investment
relative to the risk assumed, which could result in losses greater than if they
had not been used. Due to fluctuations in the price of the underlying security,
the Fund may not be able to profitably exercise an option and may lose its
entire investment in an option. Forward commitments entail the risk that the
instrument may be worth less when it is issued or received than the price the
Fund agreed to pay when it made the commitment. The use of foreign currency
forwards may result in currency exchange losses due to fluctuations in currency
exchange rates or an imperfect correlation between portfolio holdings
denominated in a particular currency and the forward contracts entered into by
the Fund.
•Sovereign
Debt Obligations Risk. Investments in debt obligations of sovereign governments may lose
value due to the government entity’s unwillingness or inability to repay
principal and interest when due in accordance with the terms of the debt or
otherwise in a timely manner. Sovereign governments may default on their debt
obligations for a number of reasons, including social, political, economic and
diplomatic changes in countries issuing sovereign debt. The Fund may have
limited (or no) recourse in the event of a default because bankruptcy,
moratorium and other similar laws applicable to issuers of sovereign debt
obligations may be substantially different from those applicable to private
issuers, and any recourse may be subject to the political climate in the
relevant country. In addition, foreign governmental entities may enjoy various
levels of sovereign immunity, and it may be difficult or impossible to bring a
legal action against a foreign governmental entity or to enforce a judgment
against such an entity. Holders of certain foreign government debt securities
may be requested to participate in the restructuring of such obligations and to
extend further loans to their issuers. There can be no assurance that the
foreign government debt securities in which the Fund may invest will not be
subject to similar restructuring arrangements or to requests for new credit,
which may adversely affect the Fund’s holdings.
•Tax
Risk. The
Fund’s investments and investment strategies, including transactions in options
and futures contracts, may be subject to special and complex federal income tax
provisions, the effect of which may be, among other things: (1) to
disallow, suspend, defer or otherwise limit the allowance of certain losses or
deductions; (2) to accelerate income to the Fund; (3) to convert
long-term capital gain, which is currently subject to lower tax rates, into
short-term capital gain or ordinary income, which are currently subject to
higher tax rates; (4) to convert an ordinary loss or a deduction into a
capital loss (the deductibility of which is more limited); (5) to treat
dividends that would otherwise
Summary
Section 14 Cromwell Marketfield
L/S Fund
constitute qualified dividend income as non-qualified dividend
income; and (6) to produce income that will not qualify as good income
under the gross income requirements that must be met for the Fund to qualify as
a regulated investment company (a “RIC”) under Subchapter M of the Internal
Revenue Code of 1986, as amended (the “Code”). Furthermore, to the extent that
any futures contract or option on a futures contract held by the Fund is a
“Section 1256 contract” under Section 1256 of the Code, the contract
will be marked to market annually, and any gain or loss will be treated as 60%
long-term and 40% short-term, regardless of the holding period for such
contract. Section 1256 contracts may include Fund transactions involving
call options on a broad-based securities index, certain futures contracts and
other financial contracts.
•Growth
Stock Risk.
Different
types of stocks tend to shift into and out of favor with stock market investors
depending on market and economic conditions. Growth stocks may be more volatile
than other stocks because they are generally more sensitive to investor
perceptions of the issuing company’s growth of earnings potential. Also, since
growth companies usually invest a high portion of earnings in their business,
growth stocks may lack the dividends of value stocks that can cushion stock
prices in a falling market.
•Value
Investing Risk.
A value stock may decrease in price or may not increase in price as anticipated
by the portfolio manager if other investors fail to recognize the company’s
value or the factors that the portfolio manager believes will cause the stock
price to increase do not occur.
•Cybersecurity
Risk. With the increased use of technologies such as the Internet to
conduct business, the Fund and the Sub-Adviser are susceptible to operational,
information security, and related risks. Cyber incidents affecting the Fund, the
Sub-Adviser, or the Fund’s service providers may cause disruptions and impact
business operations, potentially resulting in financial losses, interference
with the Fund’s ability to calculate its NAV, impediments to trading, the
inability of shareholders to transact business, violations of applicable privacy
and other laws, regulatory fines, penalties, reputational damage, reimbursement
or other compensation costs, or additional compliance costs.
•Market
Disruption Risks Related to Armed Conflict. As a result of increasingly interconnected global economies and
financial markets, armed conflict between countries or in a geographic region,
for example the current conflicts between Russia and Ukraine in Europe and Hamas
and Israel in the Middle East, has the potential to adversely impact a Fund’s
investments. Such conflicts, and other corresponding events, have had, and could
continue to have, severe negative effects on regional and global economic and
financial markets, including increased volatility, reduced liquidity, and
overall uncertainty, which may result in a negative impact on Fund performance
and the value of an investment in the Fund.
Performance
Fund
History
During
the past 10 years, the Fund was a series of different registered investment
companies. The Fund, first named the Marketfield Fund, launched on July 31,
2007 as a series of Trust for Professional Managers (“TPM”). The Fund
reorganized into the MainStay Marketfield Fund as a series of Mainstay Funds
Trust (“Mainstay”) on October 5, 2012. On April 8, 2016, the Fund
reorganized back into the Marketfield Fund (the “Predecessor Fund”) as part of
TPM where it remained until March 14, 2022, when it reorganized into the
Fund. The Fund has adopted the performance and financial history of the
Predecessor Fund. Performance information shown prior to
March 14,
2022, is that of the Predecessor Fund.
Summary
Section 15 Cromwell Marketfield
L/S Fund
Historical
Class Mapping
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Predecessor
Trust |
TPM |
Mainstay |
TPM |
TFS
(Current
Trust) |
Predecessor
Fund |
Marketfield
Fund |
MainStay
Marketfield Fund |
Marketfield
Fund |
Cromwell
Marketfield L/S Fund |
Years |
2007-2012 |
2012-2016 |
2016-2022 |
3/14/2022
- Present |
Class
Track |
Single
Class à |
Class
I à |
Class
I à |
Institutional
Class |
| N/A |
Class
A à |
Class
A à
|
Investor
Class |
| N/A |
Class
C à |
Class
C à |
Investor
Class* |
Performance
figures prior to March 14, 2022, for Investor Class shares are those of the
former Class A shares, unadjusted. Accordingly, the returns still reflect
the imposition of the Class A sales load. Going forward, Investor Class
shares will have no sales load. The former Class A shares were first offered on
October 5, 2012 and include the historical performance of the Single Class
of shares offered by the Fund from July 31, 2007 to October 5, 2012
and were adjusted to reflect differences in fees and expenses.
Performance
figures prior to March 14, 2022, for Institutional Class shares are those
of the former Class I shares, unadjusted. The former Class I shares
were first offered on October 5, 2012 and include the historical
performance of the Single Class of shares offered by the Fund from July 31,
2007 to October 5, 2012.
*
Effective
the close of business on November 17, 2023, Class C shares were
converted to Investor Class shares.
The Fund’s past
performance, before and after taxes, is not necessarily an indication of how the
Fund will perform in the future. Updated performance information
is available on the Fund’s website at www.thecromwellfunds.com or by calling the Fund
at 1-855-625-7333 (toll free).
Calendar
Year Total Return
for
Institutional Class Shares as of December 31
Summary
Section 16 Cromwell Marketfield
L/S Fund
Best
Quarter: 20.21% (Quarter ended
June 30,
2020)
Worst
Quarter: -16.77% (Quarter ended March 31,
2020)
|
|
|
|
|
|
|
|
|
|
| |
Average
Annual Total Returns
(For
the Periods Ended December 31, 2023) |
1
Year |
5
Years |
10
Years |
Institutional
Class |
|
| |
Return Before
Taxes |
-0.10% |
8.55% |
2.10% |
Return After
Taxes on Distributions |
-0.75% |
8.35% |
2.01% |
Return After
Taxes on Distributions and Sale of Fund Shares |
0.23% |
6.72% |
1.62% |
Investor
Class |
|
| |
Return Before
Taxes |
-0.34% |
7.06% |
1.28% |
S&P
500®
Total Return Index
(reflects no deduction for fees, expenses or
taxes) |
26.29% |
15.69% |
12.03% |
After-tax returns are calculated using the highest historical
individual federal marginal income tax rates and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on your
tax situation and may differ from those shown. Furthermore,
the after-tax returns shown are not relevant to shareholders who hold their
shares through tax-deferred or other tax-advantaged arrangements, such as 401(k)
plans or individual retirement accounts (“IRAs”). After-tax returns are shown for the Institutional Class shares
only and after-tax returns for the other classes will
vary.
In
certain cases, Return After Taxes on Distributions and Sale of Fund Shares may
be higher than the other return figures for the same period when a capital loss
occurs upon the redemption of Fund shares because there is an assumed tax
deduction that benefits the
investor.
Management
The
Adviser
Cromwell
Investment Advisors, LLC is the Fund’s investment adviser.
The
Sub-Adviser
Marketfield
Asset Management LLC is the Fund’s sub-adviser.
Portfolio
Managers
The
following portfolio managers are jointly and primarily responsible for the
day-to-day management of
the Fund:
Michael
C. Aronstein
President
and Chief Investment Officer, Marketfield Sub-Adviser;
Portfolio
Manager of the Fund and the Predecessor Fund since March 2004.
Purchase
and Sale of Fund Shares
You
may purchase or redeem shares by mail addressed to Cromwell Marketfield L/S
Fund, c/o U.S. Bank Global Fund Services, P.O. Box 701, Milwaukee,
Wisconsin 53201-0701, by telephone at 1-855-625-7333 (toll free), on any day the
New York Stock Exchange (“NYSE”) is open for trading, or through a broker-dealer
or other financial intermediary (such as a bank) approved by the Fund (an
“Authorized Intermediary”). You may also purchase or redeem Fund shares by wire
transfer. Purchases and redemptions by telephone are permitted if you have
previously established these options for your
Summary
Section 17 Cromwell Marketfield
L/S Fund
account.
Investors who wish to purchase or redeem Fund shares through an Authorized
Intermediary should contact the Authorized Intermediary directly.
Minimum
Investment Amounts
|
|
|
|
|
|
|
| |
|
Initial
Investment |
Subsequent
Investments |
Investor
Class |
| |
Regular
Accounts |
$2,000 |
$100 |
Individual
Retirement Accounts |
$1,000 |
$100 |
Institutional
Class |
| |
Regular
Accounts |
$100,000 |
$100 |
Individual
Retirement Accounts |
$25,000 |
$100 |
|
| |
|
| |
|
| |
Tax
Information
The
Fund’s distributions may be taxed as ordinary income unless you are investing
through a tax-deferred or other tax-advantaged arrangement, such as a 401(k)
plan or an IRA. A portion of the Fund’s distributions may also be taxable as
long-term capital gain. You may be taxed later upon withdrawal of monies from
such tax-deferred or other tax-advantaged arrangements.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase Fund shares through a broker-dealer or other financial intermediary
(such as a bank), the Fund and its related companies may pay the intermediary
for the sale of Fund shares and related services. These payments may create
conflicts of interest by influencing the broker-dealer or other intermediary and
your financial professional to recommend the Fund over another investment. Ask
your financial professional or visit your financial intermediary’s website for
more information.
Summary
Section 18 Cromwell Marketfield
L/S Fund
|
| |
Cromwell
Tran Sustainable Focus Fund |
Investment
Objective
The
investment objective of the Cromwell Tran Sustainable Focus Fund (the “Tran
Fund” or the “Fund”) is to provide principal preservation and long-term capital
appreciation.
Fees and Expenses of the
Fund
This
table describes the fees and expenses that you may pay if you buy, hold and sell
shares of the Fund. You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and examples
below.
|
|
|
|
|
|
|
| |
Shareholder
Fees (fees
paid directly from your investment) |
Investor Class |
Institutional Class |
| None |
None |
Annual
Fund Operating Expenses (expenses
that you pay each year as a percentage of the value of your
investment) |
Management
Fees |
0.85% |
0.85% |
Distribution
and/or Service (12b-1) Fees (1) |
0.25% |
None |
Other
Expenses |
0.77% |
0.77% |
Total
Annual Fund Operating Expenses(2) |
1.87% |
1.62% |
Less:
Fee Waiver and/or Expense Reimbursement |
-0.52% |
-0.52% |
Total
Annual Fund Operating Expenses After Fee Waiver and/or Expense
Reimbursement(2) |
1.35% |
1.10% |
(1)Distribution
and/or Service (12b-1) Fees are reflected at their maximum amounts, (0.25%
Investor Class) but the actual percentages may be less, as reflected in the
“Financial Highlights” section of the Prospectus.
(2)Pursuant
to an operating expense limitation agreement, Cromwell Investment Advisors, LLC,
the Fund’s investment adviser (the “Adviser”), has agreed to waive its
management fees and/or reimburse Fund expenses to ensure that Total Annual Fund
Operating Expenses (exclusive of contingent deferred sales loads, taxes,
leverage, interest, brokerage commissions, expenses incurred in connection with
any merger or reorganization, acquired fund fees and expenses, and extraordinary
expenses) do not exceed 1.10% and 0.85% of the Fund’s average daily net assets
for Investor Class shares and Institutional Class shares, respectively, through
August 31, 2024. Effective September 1, 2024, the Adviser has agreed
to waive its management fees and/or reimburse Fund expenses to ensure that Total
Annual Fund Operating Expenses (exclusive of contingent deferred sales loads,
taxes, leverage, interest, brokerage commissions, expenses incurred in
connection with any merger or reorganization, acquired fund fees and expenses,
and extraordinary expenses) do not exceed 1.35% and 1.10% of the Fund’s average
daily net assets for Investor Class shares and Institutional Class shares,
respectively, from September 1, 2024 through April 30, 2025 (“Expense Caps”). The
operating expense limitation agreement can be terminated only by, or with the
consent of, the Trust’s Board of Trustees (the “Board of Trustees”). The Adviser
may request recoupment of previously waived fees and paid expenses from the Fund
for up to 36 months from the date such fees and expenses were waived or paid,
subject to the operating expense limitation agreement, if such reimbursement
will not cause the Fund’s expense ratio, after recoupment has been taken into
account, to exceed the lesser of: (1) the expense limitation in place at
the time of the waiver and/or expense payment; or (2) the expense
limitation in place at the time of the recoupment. Total Annual Fund Operating
Expenses After Fee Waiver and/or Expense Reimbursement do not correlate to the
Financial Highlights because they reflect the Expense Caps taking effect on
September 1, 2024.
Example
This example is intended to help you compare the costs of
investing in the Fund with the cost of investing in other mutual funds. The
example assumes that you invest $10,000 in the Fund for the time periods
indicated and that you then redeem or hold all of your shares at the end of
those periods. The example also assumes that your investment has a 5% return
each year and that the Fund’s operating expenses remain the same (taking into
account the Expense Cap only in the first year). Although your
actual costs may be higher or lower, based on these assumptions, your costs
would be:
Summary
Section 19 Cromwell Tran
Sustainable Focus Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| One
Year |
Three
Years |
Five
Years |
Ten
Years |
Investor
Class |
$137 |
$537 |
$963 |
$2,148 |
Institutional
Class |
$112 |
$460 |
$832 |
$1,878 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
shares are held in a taxable account. These transaction costs and potentially
higher taxes, which are not reflected in the Total Annual Fund Operating
Expenses or in the example, affect the Fund’s performance. During
the fiscal period
from
May 1, 2023 through December 31,
2023,
the portfolio turnover rate of the Fund was 42%
of the average value of its portfolio.
Principal Investment
Strategies
To
achieve the Fund’s investment objective, Tran Capital Management, L.P., the
investment sub-adviser (the “Tran Sub-Adviser” or “Sub-Adviser”) normally
invests in the common stocks of approximately 15 to 25 mid- and large-cap
companies with market capitalizations greater than $2 billion that have, in
the Tran Sub-Adviser’s opinion, a competitive advantage. The Sub-Adviser uses an
intensive fundamental due diligence research process to attempt to identify
companies with owner-oriented management teams that, in the view of the
Sub-Adviser, generate consistently high returns on capital. Additionally, the
companies in which the Fund invests will, in the opinion of the Sub-Adviser,
possess high margins, strong cash flow, zero-to-moderate debt and trade at a
price below intrinsic value.
Under normal
market conditions, the Fund will invest at least 80% of its assets in
sustainable equity securities. For this purpose, the Sub-Adviser defines
sustainable securities as those that score 3 or higher on its internal 5-point
ESG scale based on the evaluation of factors described below. In
ranking a company’s ESG criteria, the Sub-Adviser considers both the external
impact of a company’s product or service and the company’s internal policies,
controls, and interactions with shareholders, employees, and other stakeholders.
External and internal factors are weighted equally. The Sub-Adviser does not
employ negative screening and will consider all companies in all industries for
the portfolio.
Through
its investment process, the Sub-Adviser seeks to build an understanding of the
competitive advantages, financial drivers, and key risks and uncertainties
related to an investment under consideration. The Sub-Adviser believes that its
“ESG” framework (as further described below) can aid in identifying sustainable
franchises and may, in its view, better position the Fund to perform over the
long term and through market cycles. The Sub-Adviser’s internally-developed ESG
framework considers environmental, social, and governance risks and
value-creation opportunities. The Sub-Adviser obtains information related to the
application of its ESG framework through the Sub-Adviser’s own research and
analysis of publicly available information, including information related to a
company’s existing policies and actions related to social responsibility, as
determined by the Sub-Adviser’s ESG framework. The Sub-Adviser also obtains data
and information which is incorporated into its ESG framework through direct
engagement with management teams of the Fund’s portfolio companies or potential
portfolio companies.
The
Sub-Adviser takes a qualitative approach to ESG integration. By assessing a
security’s positive, neutral, or negative impact on these internal and external
ESG issues, the Sub-Adviser aims to identify value-creating opportunities and
avoid value-destructing risk. To the extent that the Sub-Adviser has strong
data, evidence, and ability to estimate the materiality of ESG risks and
opportunities, financial
Summary
Section 20 Cromwell Tran
Sustainable Focus Fund
models
and valuation analysis may be adjusted to incorporate material factors. The
Sub-Adviser weights its internal rating for a security’s acceptability under
each ESG factor to make a decision.
External
factors considered include, but are not limited to:
•a
company’s contribution to climate change and goals for reaching net
zero
•impact
on natural resources
•promotion
of clean, renewable, and green activities
•product
safety and responsibility
•interaction
with the communities served by the company
•promotion
of access to information, healthcare, financing, etc.
•strength
of ESG reporting and quality of disclosures and transparency
Internal
factors considered include, but are not limited to:
•policies
and actions that promote sustainability
•footprint
of corporate facilities
•treatment
of employees
•diversity
& inclusion measures along with goals or policies for
improvement
•having
and enabling a culture of feedback
•diverse
representation on the Board of Directors and executive team
•management
alignment with shareholders
•strong
checks and balances
The
Fund is non-diversified, which means that a significant portion of the Fund’s
assets may be invested in the securities of a single or small number of
companies and/or in a more limited number of sectors than a diversified mutual
fund. Although the Fund may not invest 25% or more of its net assets in one or
more industries, the Fund may focus its investments from time to time in one or
more sectors of the economy or stock market.
The
Sub-Adviser chooses to sell securities from the portfolio when the fundamentals
of the company are deteriorating or when the Sub-Adviser identifies better
opportunities. When considering better opportunities, securities that may score
poorly with respect to such factors may be purchased and retained by the Fund
while the Fund may sell or not invest in securities that may score strongly on
such factors because the Sub-Adviser considers the poor ESG security to be a
better value. Securities in the Fund’s portfolio that score poorly (i.e., 2 or less on the Sub-Adviser’s 5-point scale) with respect to the ESG
factors described above will not be counted towards the Fund’s 80%
policy.
Principal Risks
In
addition to possibly not achieving your investment goals,
you could lose money by investing in the Fund.
An
investment in the Fund is not a deposit of the bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
The
principal risks of investing in the Fund are:
•Sustainable
Investment Risk:
The Fund follows a sustainable investment approach by investing in companies
that demonstrate a focus on long-term sustainability in their overall strategy
and business practices. In pursuing such a strategy, the Fund may forgo
opportunities to gain exposure to certain companies, industries or sectors, and
may be overweight or underweight in certain industries or sectors relative to
its benchmark index, which may cause the Fund’s performance to be more or less
Summary
Section 21 Cromwell Tran
Sustainable Focus Fund
sensitive
to developments affecting those sectors. In addition, since sustainable
investing takes into consideration factors beyond traditional financial
analysis, the Fund may have fewer investment opportunities available to it than
it would have if it did not take into account sustainable criteria for
investments. Sustainability-related information provided by issuers and third
parties, upon which the portfolio managers may rely, continues to develop, and
may be incomplete, inaccurate, use different methodologies, or be applied
differently across companies and industries. The Sub-Adviser’s criteria of
sustainable investing will vary from other managers. Further, the regulatory
landscape for sustainable investing in the United States is still developing and
future rules and regulations may require the Fund to adapt its investment
process. There is also a risk that the companies identified through the
investment process may fail to adhere to sustainable business practices, which
may result in the Fund choosing to sell a security when it might otherwise be
disadvantageous to do so. Further, investors may differ in their views of what
constitutes positive or negative ESG characteristics of a security. As a result,
the Fund may invest in securities that do not reflect the beliefs of any
particular investor. There is no guarantee that sustainable investments will
outperform the broader market on either an absolute or relative basis. There is
also no guarantee that the Sub-Adviser will successfully implement strategies or
make investments in companies that result in favorable ESG outcomes while
enhancing long-term shareholder value and achieving financial
returns.
•ESG
Strategy Risk. The Sub-Adviser’s use of its ESG framework could cause it to perform
differently compared to funds that do not have such a policy. The criteria
related to this ESG framework may result in the Fund forgoing opportunities to
buy certain securities when it might otherwise be advantageous to do so, or
selling securities for ESG reasons when it might be otherwise disadvantageous
for it to do so. In addition, there is a risk that the companies identified by
the ESG framework do not operate as expected when addressing ESG issues. There
are significant differences in interpretations of what it means for a company to
have positive ESG characteristics. While the Sub-Adviser believes its
definitions are reasonable, the portfolio decisions it makes may differ with
other investors’ or advisers’ views. To the extent the Sub-Adviser references
third-party research and analytics in conducting its proprietary analysis, there
is no guarantee that the data will be accurate. Scores from third-party
providers may vary across providers.
•Equity
Securities Risk. Investments in common stocks and other equity securities are
particularly subject to the risk of changing economic, stock market, industry
and company conditions and the risks inherent in a portfolio manager’s ability
to anticipate such changes that can adversely affect the value of the Fund’s
holdings.
•Market
Changes Risk. The value of the Fund’s investments may change because of broad
changes in the markets in which the Fund invests, which could cause the Fund to
underperform other funds with similar objectives. From time to time, markets may
experience periods of acute stress that may result in increased volatility and
increased redemptions. Such conditions may add significantly to the risk of
volatility in the net asset value (“NAV”) of the Fund’s
shares.
•Large-Capitalization
Stock Risk. Larger, more established companies may be unable to respond quickly
to new competitive challenges such as changes in consumer tastes or innovative
smaller competitors. Also, large-capitalization companies are sometimes unable
to attain the high growth rates of successful, smaller companies, especially
during extended periods of economic expansion.
•Management
Risk.
Because the Fund is an actively managed investment portfolio, security selection
or focus on securities in a particular style, market sector or group of
companies may cause the Fund to incur losses or underperform relative to its
benchmarks or other funds with a similar investment
Summary
Section 22 Cromwell Tran
Sustainable Focus Fund
objective. There can be no guarantee that the Sub-Adviser’s
investment techniques and risk analysis will produce the desired
result.
•Recent
Market Events Risk. U.S. and international markets have experienced significant periods
of volatility in recent months and years due to a number of economic, political
and global macro factors including rising inflation, the possibility of a
national or global recession, the war between Russia and Ukraine, and the
conflict between Israel and Hamas. Inflation and rapid fluctuations in inflation
rates may have negative effects on the economies and securities markets of the
United States and other countries. Pandemics and epidemics have been and can be
highly disruptive to economies and markets, adversely impacting individual
companies, sectors, industries, markets, currencies, interest and inflation
rates, credit ratings, investor sentiment, and other factors affecting the value
of the Funds’ investments. The ongoing armed conflict between Ukraine and Russia
in Europe and Israel and Hamas in the Middle East could have severe adverse
effects on the regional or global economies and the markets for certain
securities.
•Mid-Cap
Securities Risk. Equity securities of mid-cap companies may be subject to greater
price volatility, significantly lower trading volumes, cyclical, static or
moderate growth prospects and greater spreads between their bid and ask prices
than equity securities of larger companies. Because these businesses frequently
rely on narrower product lines and niche markets, they can suffer isolated
setbacks.
•Non-Diversified
Fund Risk. The
Fund is non-diversified and therefore a greater percentage of holdings may be
focused in a small number of issuers or a single issuer, which can place the
Fund at greater risk. Notwithstanding the Fund’s status as a “non-diversified”
investment company under the Investment Company Act of 1940, as amended (the
“1940 Act”), the Fund intends to qualify as a regulated investment company
accorded special tax treatment under the Internal Revenue Code, which imposes
its own diversification requirements that are less restrictive than the
requirements applicable to “diversified” investment companies under the 1940
Act.
•Sector
Risk. The
Fund may invest a significant portion of its assets in particular sectors of the
economy and, therefore, the performance of the Fund could be negatively impacted
and especially sensitive to developments and events that affect those particular
sectors.
◦Information
Technology Sector Risk.
Factors such as the failure to obtain, or delays in obtaining, financing or
regulatory approval, intense competition, product compatibility, consumer
preferences, corporate capital expenditure, rapid obsolescence, competition from
alternative technologies, and research and development of new products may
significantly affect the market value of securities of issuers in the
information technology sector.
•Value
Investing Risk. A value stock may decrease in price or may not increase in price as
anticipated by the portfolio manager if other investors fail to recognize the
company’s value or the factors that the portfolio manager believes will cause
the stock price to increase do not occur.
•Cybersecurity
Risk. With the increased use of technologies such as the Internet to
conduct business, the Fund and the Sub-Adviser are susceptible to operational,
information security, and related risks. Cyber incidents affecting the Fund, the
Sub-Adviser, or the Fund’s service providers may cause disruptions and impact
business operations, potentially resulting in financial losses, interference
with the Fund’s ability to calculate its NAV, impediments to trading, the
inability of shareholders to transact business, violations of applicable privacy
and other laws, regulatory fines, penalties, reputational damage, reimbursement
or other compensation costs, or additional compliance costs.
Summary
Section 23 Cromwell Tran
Sustainable Focus Fund
•Market
Disruption Risks Related to Armed Conflict. As a result of increasingly interconnected global economies and
financial markets, armed conflict between countries or in a geographic region,
for example the current conflicts between Russia and Ukraine in Europe and Hamas
and Israel in the Middle East, has the potential to adversely impact a Fund’s
investments. Such conflicts, and other corresponding events, have had, and could
continue to have, severe negative effects on regional and global economic and
financial markets, including increased volatility, reduced liquidity, and
overall uncertainty, which may result in a negative impact on Fund performance
and the value of an investment in the Fund.
Performance
The bar chart demonstrates the risks of investing in the Fund
by showing changes in the Fund’s performance from year to year.
The Average Annual Total Returns table also demonstrates these risks by showing
how the Fund’s average annual returns for the 1-year, 5-year, 10-year, and since
inception periods compare with those of a broad measure of market performance.
Performance data for the classes varies based on differences in their fee and
expense structures.
Performance data for the classes varies based on differences in their
fee and expense structures. For the periods prior to August 8, 2022,
performance figures reflect the historical performance of the Tran Capital
Focused Fund, a series of FundVantage Trust (the “Predecessor Fund”). Prior to
August 8, 2022, Investor Class shares were Class A shares. Performance
figures of Investor Class shares do not reflect Class A sales loads in the
bar chart. Class A sales loads are reflected in the Average Annual Total
Returns table for periods prior to August 8, 2022. No other adjustments
were made to historical performance returns. Additionally, the Fund has adopted
the Financial Statements of the Predecessor Fund. The Fund’s past
performance, before and after taxes, is not necessarily an indication of how the
Fund will perform in the future. Updated performance information
is available on the Fund’s website at www.thecromwellfunds.com or by calling the Fund
at 1-855-625-7333 (toll free).
Calendar Year Total Return
for Investor Class Shares as of December 31
Best
Quarter: 21.72% (Quarter ended
March 31,
2019)
Worst
Quarter: -20.55% (Quarter ended December 31,
2018)
Summary
Section 24 Cromwell Tran
Sustainable Focus Fund
|
|
|
|
|
|
|
|
|
|
| |
Average Annual
Total Returns (for the Periods Ended December 31,
2023) |
1
Year |
5
Year |
10
Years |
Investor
Class |
|
| |
Return Before
Taxes |
25.73% |
12.02% |
7.57% |
Return After
Taxes on Distributions |
25.73% |
8.98% |
3.75% |
Return After
Taxes on Distributions and Sale of Fund Shares |
15.23% |
9.52% |
5.22% |
Institutional
Class |
|
| |
Return
Before Taxes |
26.03% |
13.47% |
8.39% |
S&P
500®
Total Return Index
(reflects no deduction for fees, expenses or
taxes) |
26.29% |
15.69% |
12.03% |
After-tax returns are calculated using the highest historical
individual federal marginal income tax rates and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on your
tax situation and may differ from those shown. Furthermore,
the after-tax returns shown are not relevant to shareholders who hold their
shares through tax-deferred or other tax-advantaged arrangements, such as 401(k)
plans or individual retirement accounts (“IRAs”). After-tax returns are shown for the Investor Class shares only
and after-tax returns for the other classes will
vary.
In certain
cases, Return After Taxes on Distributions and Sale of Fund Shares may be higher
than the other return figures for the same period when a capital loss occurs
upon the redemption of Fund shares because there is an assumed tax deduction
that benefits the investor.
Management
The
Adviser
Cromwell
Investment Advisors, LLC is the Fund’s investment adviser.
The
Sub-Adviser
Tran
Capital Management, L.P. is the Fund’s sub-adviser.
Portfolio
Managers
The
following portfolio managers are jointly and primarily responsible of the
day-to-day management of the Fund:
Quoc
Tran
Managing
Partner and Chief Investment Officer, Tran Sub-Adviser;
Portfolio
Manager of the Fund and its predecessor since inception,
September 2007.
Michael
Im
Director
of Research and Co-Portfolio Manager, Tran Sub-Adviser;
Portfolio
Manager of the Fund and its predecessor since 2020.
Purchase
and Sale of Fund Shares
You
may purchase or redeem shares by mail addressed to Cromwell Tran Sustainable
Focus Fund, c/o U.S. Bank Global Fund Services, P.O. Box 701,
Milwaukee, Wisconsin 53201-0701, by telephone at 1-855-625-7333 (toll free), on
any day the New York Stock Exchange (“NYSE”) is open for trading, or through a
broker-dealer or other financial intermediary (such as a bank) approved by the
Fund (an “Authorized Intermediary”). You may also purchase or redeem Fund shares
by wire transfer. Purchases
Summary
Section 25 Cromwell Tran
Sustainable Focus Fund
and
redemptions by telephone are permitted if you have previously established these
options for your account. Investors who wish to purchase or redeem Fund shares
through an Authorized Intermediary should contact the Authorized Intermediary
directly.
Minimum
Investment Amounts
|
|
|
|
|
|
|
| |
|
Initial
Investment |
Subsequent
Investments |
Investor
Class |
| |
Regular
Accounts |
$2,000 |
$100 |
Individual
Retirement Accounts |
$1,000 |
$100 |
Institutional
Class |
| |
Regular
Accounts |
$100,000 |
$100 |
Individual
Retirement Accounts |
$25,000 |
$100 |
|
| |
|
| |
|
| |
Tax
Information
The
Fund’s distributions may be taxed as ordinary income unless you are investing
through a tax-deferred or other tax-advantaged arrangement, such as a 401(k)
plan or an IRA. A portion of the Fund’s distributions may also be taxable as
long-term capital gain. You may be taxed later upon withdrawal of monies from
such tax-deferred or other tax-advantaged arrangements.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase Fund shares through a broker-dealer or other financial intermediary
(such as a bank), the Fund and its related companies may pay the intermediary
for the sale of Fund shares and related services. These payments may create
conflicts of interest by influencing the broker-dealer or other intermediary and
your financial professional to recommend the Fund over another investment. Ask
your financial professional or visit your financial intermediary’s website for
more information.
Summary
Section 26 Cromwell Tran
Sustainable Focus Fund
|
| |
Cromwell
Foresight Global Sustainable Infrastructure
Fund |
Investment
Objective
The
Cromwell Foresight Global Sustainable Infrastructure Fund’s (the “Foresight
Fund’ or the “Fund”) investment objective is to achieve capital
appreciation.
Fees and Expenses of the
Fund
This
table describes the fees and expenses that you may pay if you buy, hold and sell
shares of the Fund. You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and examples
below.
|
|
|
|
|
|
|
| |
Shareholder
Fees (fees
paid directly from your investment) |
Investor Class |
Institutional Class |
| None |
None |
Annual
Fund Operating Expenses (expenses
that you pay each year as a percentage of the value of your
investment) |
Management
Fees |
0.85% |
0.85% |
Distribution
and Service (12b-1) Fees |
0.25% |
None |
Other
Expenses |
0.52% |
0.52% |
Acquired
Fund Fees and Expenses |
0.02% |
0.02% |
Total
Annual Fund Operating Expenses(1) |
1.64% |
1.39% |
Less:
Fee Waiver and/or Expense Reimbursement |
-0.32% |
-0.32% |
Total
Annual Fund Operating Expenses After Fee Waiver and/or Expense
Reimbursement(1)(2) |
1.32% |
1.07% |
(1) Total Annual Fund Operating Expenses do not correlate to the
Ratio of Expenses to Average Net Assets found within the “Financial Highlights”
section of this Prospectus, because Acquired Fund Fees and Expenses are not
included in the ratio.
(2) Pursuant
to an operating expense limitation agreement, Cromwell Investment Advisors, LLC,
the Fund’s investment adviser (the “Adviser”), has agreed to waive its
management fees and/or reimburse Fund expenses to ensure that Total Annual Fund
Operating Expenses (exclusive of taxes, leverage, interest, brokerage
commissions, expenses incurred in connection with any merger or reorganization,
acquired fund fees and expenses, and extraordinary expenses) do not exceed 1.30%
and 1.05% of the Fund’s average daily net assets for Investor Class shares and
Institutional Class shares, respectively, through at least January 31, 2026 (“Expense Caps”). The
operating expense limitation agreement can be terminated only by, or with the
consent of, the Trust’s Board of Trustees (the “Board of Trustees”). The Adviser
may request recoupment of previously waived fees and paid expenses from the Fund
for up to 36 months from the date such fees and expenses were waived or
paid, subject to the operating expense limitation agreement, if such
reimbursement will not cause the Fund’s expense ratio, after recoupment has been
taken into account, to exceed the lesser of: (1) the expense limitation in
place at the time of the waiver and/or expense payment; or (2) the expense
limitation in place at the time of the
recoupment.
Example
This example is intended to help you compare the costs of
investing in the Fund with the cost of investing in other mutual funds. The
example assumes that you invest $10,000 in the Fund for the time periods
indicated and that you then redeem or hold all of your shares at the end of
those periods. The example also assumes that your investment has a 5% return
each year and that the Fund’s operating expenses remain the same (taking into
account the Expense Cap only in the first year). Although your
actual costs may be higher or lower, based on these assumptions, your costs
would be:
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| One
Year |
Three
Years |
Five
Years |
Ten
Years |
Investor
Class |
$134 |
$486 |
$862 |
$1,917 |
Institutional
Class |
$109 |
$409 |
$730 |
$1,641 |
Summary
Section 27 Cromwell Foresight
Global Sustainable Infrastructure Fund
Portfolio
Turnover
The Fund pays transaction costs, such as commissions, when it buys
and sells securities (or “turns over” its portfolio). A higher portfolio
turnover rate may indicate higher transaction costs and may result in higher
taxes when Fund shares are held in a taxable account. These transaction costs
and potentially higher taxes, which are not reflected in the Total Annual Fund
Operating Expenses or in the example, affect the Fund’s performance. During the
fiscal period from January 31, 2023 through December 31, 2023, the
portfolio turnover rate of the Fund was 20% of the average value of its
portfolio.
Principal Investment
Strategies
Under normal
circumstances, the Fund invests at least 80% of its net assets (plus any
borrowings for investment purposes) in equity securities of sustainable
infrastructure companies. The Fund will invest directly in the
shares of companies (including listed investment trusts, real estate investment
trusts (“REITs”), ETFs or units of master limited partnerships (“MLPs”) that, in
each case, invest in infrastructure companies and are publicly-traded (listed)
on stock exchanges in developed markets, meaning North America, Western Europe
and Asia Pacific (specifically Australia, New Zealand, Singapore, Japan, Hong
Kong); and that own and operate real infrastructure or sustainable assets
anywhere in the world. Such companies’ revenue streams are typically directly or
indirectly supported by long-term government or public sector contracts and
government supported initiatives.
The
Fund considers a company to be an infrastructure company if it derives at least
50% of its revenue or profits from the ownership or operation of infrastructure
assets, such as the physical structures, networks and systems of transportation,
energy, water and sewage, medical facilities, government facilities and
communication assets.
The
Fund defines “sustainable companies” as companies which, through both their
business operations and the impact of their products or services, have a
positive environmental and/or social effect on their stakeholders. The Fund’s
sustainability criteria states that the Fund will only invest in the shares of a
company if Foresight Group LLP, the investment sub-adviser (the “Foresight
Sub-Adviser” or “Sub-Adviser”), in its discretion, considers that the company
delivers a net social or environmental benefit. In determining whether a company
delivers a net social or environmental gain, the Sub-Adviser will assess company
shares based on the ten principles of the United Nations Global Compact for
business which cover areas including human rights, labor rights, environmental
safeguards and combating bribery and corruption. The Sub-Adviser utilizes its
own company research and the portfolio manager’s judgment to determine if a
company is contributing positively to sustainable development. The Sub-Adviser
may but is not obligated to consider external research from third-party
providers.
The
sustainable infrastructure companies in which the Fund invests will typically
own and operate assets in the following infrastructure subsectors: renewable
energy generation (e.g., offshore
wind, onshore wind, solar energy, and hydro-electricity), core economic
infrastructure (e.g., schools,
hospitals and transport), property with infrastructure characteristics
(e.g., social
housing and medical facilities) and digital infrastructure (e.g., data
centers and communications towers).
As
a “global” Fund, under normal market conditions, the Fund will provide exposure
to investments that are economically tied to at least three different countries,
not including the U.S. Under normal circumstances, at least 40%, unless market
conditions are not deemed favorable, in which case at least 30%, of the Fund’s
net assets will provide exposure to investments that are economically tied to
countries other than the U.S, including depositary receipts. The Fund considers
a company to be located outside the U.S. when the company’s primary listing
location or headquarters is outside of the U.S. No more than
Summary
Section 28 Cromwell Foresight
Global Sustainable Infrastructure Fund
50%
of the Fund by value will be invested in shares of companies that have a primary
listing in a single country.
The
Fund may also invest in cash for liquidity and cash flow purposes and to pay
Fund expenses and redemptions.
Sustainability
considerations play an important role in the Sub-Adviser’s stock selection
process. The Sub-Adviser uses a combination of qualitative and quantitative
measurements when determining when a company meets the sustainability criteria.
From a qualitative perspective, the Sub-Adviser’s due diligence process involves
an initial framework driven approach assessing whether a company aligns with the
10 principles of the UN Global Compact (“UNGC”) combined with a qualitative
assessment on whether the company’s strategy, economic activity, and fundamental
purpose help to deliver environmental or social benefits. This is assessed on an
ongoing basis through continued monitoring and engagement with the company.
Ongoing engagement with holdings includes discussions to improve climate-related
practices, change sustainability outcomes, and improve disclosures. Furthermore,
the Sub-Adviser will undertake continued engagement with the company to ensure
that the business model, sustainability strategy, investment strategy, and risk
policies continue to align with the initial assessment. From a quantitative
perspective, the Sub-Adviser may, but is not obligated to, assess, interpret and
evaluate data and analysis provided by external research providers as part of
its process. This is an important pillar upon which assessments of the continued
compliance of securities to the Fund’s sustainability criteria is measured.
The
Sub-Adviser continuously tracks the operational performance of the Fund’s
holdings with a specific focus on impact metrics, ESG performance, and progress
against targets and goals. For this purpose, impact metrics include carbon
footprint as a proportion of enterprise value, the proportion of a company’s
activities negatively affecting biodiversity-sensitive areas, violations of the
UN Global Compact Principles, and board gender diversity. The Sub-Adviser has
developed a data-driven proprietary monitoring system which evaluates holdings
across multiple metrics and key performance indicators to enable the
identification of relative weaknesses and evaluation of progress over the
holding period. This engagement forms part of the ongoing monitoring process. If
the Sub-Adviser believes that after initial due diligence, ongoing monitoring,
and engagement a security no longer meets the threshold required to match the
Fund’s sustainability criteria, the Sub-Adviser will not make any further
investments in the company and, in an orderly fashion, will seek to sell its
investment from such a company in a controlled and orderly manner.
The
Sub-Adviser’s process in conducting its sustainability assessment involves:
(1)Summarizing
the overall due diligence findings related to sustainability of a company’s
operations.
(2)Reviewing
assessments of each company’s compliance with the ten principles of the
UNGC.
(3)Assessing
each asset / sector impact on the environment and society.
(4)Conducting
a review of each company’s strategy, sustainability integration and
performance.
(5)Identifying
topics during due diligence for specific focus, key performance indicators, and
engagement with management.
(6)Summarizing
the process and findings.
The
process above includes quantitative and qualitative inputs with the overall goal
to identify companies that meet the sustainable investment criteria of complying
with the ten UNGC principles and delivering a net environmental and/or social
benefit.
Summary
Section 29 Cromwell Foresight
Global Sustainable Infrastructure Fund
Principal
Risks
In
addition to possibly not achieving your investment goals,
you could lose money by investing in the Fund.
An
investment in the Fund is not a deposit of the bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
The
principal risks of investing in the Fund are:
•Infrastructure
Companies Risk. Infrastructure
companies may be subject to a variety of factors that may adversely affect their
business or operations, including high interest costs in connection with capital
construction programs, high leverage, costs associated with environmental and
other regulations, the effects of economic slowdown, surplus capacity, increased
competition from other providers of services, uncertainties concerning the
availability of fuel at reasonable prices, the effects of energy conservation
policies and other factors. Some of the specific risks that infrastructure
companies may be particularly affected by, or subject to, include the following:
regulatory risk, technology risk, regional or geographic risk, natural disasters
risk, through-put risk, project risk, strategic asset risk, operation risk,
customer risk, interest rate risk, inflation risk and financing risk.
In
particular, the operations of infrastructure projects are exposed to unplanned
interruptions caused by significant catastrophic events, such as cyclones,
earthquakes, landslides, floods, explosion, fire, terrorist attack, major plant
breakdown, pipeline or electricity line rupture or other disasters. Operational
disruption, as well as supply disruption, could adversely impact the cash flows
available from these assets.
Further,
national and local environmental laws and regulations affect the operations of
infrastructure projects. Standards are set by these laws, and regulations are
imposed regarding certain aspects of health and environmental quality, and they
provide for penalties and other liabilities for the violation of such standards,
and establish, in certain circumstances, obligations to remediate and
rehabilitate current and former facilities and locations where operations are,
or were, conducted. These laws and regulations may have a detrimental impact on
the financial performance of infrastructure
projects.
•Industrial
Sector Risk. The industrial sector can be significantly affected by, among other
things, worldwide economic growth, supply and demand for specific products and
services, rapid technological developments, international political and economic
developments, environmental issues, tariffs and trade barriers, and tax and
governmental regulatory policies. As the demand for, or prices of, industrials
increase, the value of the Fund’s investments generally would be expected to
also increase. Conversely, declines in the demand for, or prices of, industrials
generally would be expected to contribute to declines in the value of such
securities. Such declines may occur quickly and without warning and may
negatively impact the value of the Fund and your investment.
•Information
Technology Sector Risk.
Factors such as the failure to obtain, or delays in obtaining, financing or
regulatory approval, intense competition, product compatibility, consumer
preferences, corporate capital expenditure, rapid obsolescence, competition from
alternative technologies, and research and development of new products may
significantly affect the market value of securities of issuers in the
information technology sector.
•Listed
Investment Trusts Risk. Listed
investment trusts are investment vehicles organized as trusts that issue a fixed
number of shares in an initial public offering, after which their shares trade
at market value on an exchange. The net asset value of an investment trust
fluctuates due to the valuation changes of the investment securities or assets
held by the investment trust (assets denominated in foreign currencies are also
subject to the exchange rate fluctuations subject to hedging
strategy).
Summary
Section 30 Cromwell Foresight
Global Sustainable Infrastructure Fund
However, because the shares of a listed investment trust trade at
market value on an exchange, such shares can trade below their net asset value
(known as a discount) or above net asset value (known as a premium). Current
market uncertainty has pushed investment trusts to the widest discounts in
years, and there is a risk that such discounts may continue to widen after the
Fund has made an investment. Investment trusts that trade at a discount are not
typically able to issue new shares to invest in new assets or securities and may
not succeed in conducting accretive investment activity for
growth.
•Sustainable
Investment Risk:
The Fund follows a sustainable investment approach by investing in companies
that demonstrate a focus on long-term sustainability in their overall strategy
and business practices. In pursuing such a strategy, the Fund may forgo
opportunities to gain exposure to certain companies, industries or sectors, and
may be overweight or underweight in certain industries or sectors relative to
its benchmark index, which may cause the Fund’s performance to be more or less
sensitive to developments affecting those sectors. In addition, since
sustainable investing takes into consideration factors beyond traditional
financial analysis, the Fund may have fewer investment opportunities available
to it than it would have if it did not take into account sustainable criteria
for investments. Sustainability-related information provided by issuers and
third parties, upon which the portfolio managers may rely, continues to develop,
and may be incomplete, inaccurate, use different methodologies, or be applied
differently across companies and industries. The Sub-Adviser’s criteria of
sustainable investing will vary from other managers. Further, the regulatory
landscape for sustainable investing in the United States is still developing and
future rules and regulations may require the Fund to adapt its investment
process. There is also a risk that the companies identified through the
investment process may fail to adhere to sustainable business practices, which
may result in the Fund choosing to sell a security when it might otherwise be
disadvantageous to do so. Further, investors may differ in their views of what
constitutes positive or negative ESG characteristics of a security. As a result,
the Fund may invest in securities that do not reflect the beliefs of any
particular investor. There is no guarantee that sustainable investments will
outperform the broader market on either an absolute or relative basis. There is
also no guarantee that the Sub-Adviser will successfully implement strategies or
make investments in companies that result in favorable ESG outcomes while
enhancing long-term shareholder value and achieving financial
returns.
•Foreign
Securities Risk. Investments in foreign securities may be riskier than investments in
U.S. securities. Differences between U.S. and foreign regulatory regimes and
securities markets, including less stringent investor protections and disclosure
standards of some foreign markets, less liquid trading markets and political and
economic developments in foreign countries, may affect the value of the Fund’s
investments in foreign securities. Foreign securities may also subject the
Fund’s investments to changes in currency rates.
•Risk
of Focusing Investment on Region or Country:
Investing a significant portion of assets in one country or region makes the
Fund more dependent upon the political and economic circumstances of that
particular country or region.
◦Asia/Pacific
Investment Risk. Investments in countries in the Asian/Pacific region will be
impacted by the market conditions, legislative or regulatory changes,
competition, or political, economic and other developments in Asia or the
Pacific. Investments in China, New Zealand, Australia and Singapore may subject
the Fund to certain additional risks, including exposure to currency
fluctuations, less liquidity, expropriation, confiscatory taxation,
nationalization, exchange control regulations (including currency blockage),
trading halts, imposition of tariffs, limitations on repatriation and differing
legal standards.
Summary
Section 31 Cromwell Foresight
Global Sustainable Infrastructure Fund
◦Eurozone
Investment Risk. The Economic and Monetary Union of the European Union (EMU) is
comprised of the European Union (EU) members that have adopted the euro
currency. By adopting the euro as its currency, a member state relinquishes
control of its own monetary policies and is subject to fiscal and monetary
controls. EMU members could voluntarily abandon or be forced out of the euro.
Such events could impact the market values of Eurozone and various other
securities and currencies, cause redenomination of certain securities into less
valuable local currencies and create more volatile and illiquid markets. Certain
countries and regions in the EU are experiencing significant financial
difficulties. Some of these countries may be dependent on assistance from other
European governments and institutions or agencies. One or more countries could
depart from the EU, which could weaken the EU and, by extension, its remaining
members. For example, the United Kingdom’s departure, described in more detail
below. As a result of continuing political tensions and armed conflicts,
including the war between Ukraine and Russia, the U.S. and the European Union
imposed sanctions on certain Russian individuals and companies, including
certain financial institutions, and have limited certain exports and imports to
and from Russia. The war has contributed to recent market volatility and may
continue to do so.
◦United
Kingdom Investment Risk. Commonly known as “Brexit,” the United
Kingdom’s exit from the EU may result in substantial volatility in foreign
exchange markets and may lead to a sustained weakness in the British pound’s
exchange rate against the United States dollar, the euro and other currencies,
which may impact Fund returns. Brexit may destabilize some or all of the other
EU member countries and/or the Eurozone. These developments could result in
losses to the Fund, as there may be negative effects on the value of the Fund’s
investments and/or on the Fund’s ability to enter into certain transactions or
value certain investments, and these developments may make it more difficult for
the Fund to exit certain investments at an advantageous time or
price.
•Depositary
Receipts Risk.
Investments in depositary receipts may entail the special risks of foreign
investing, including currency exchange fluctuations, government regulations, and
the potential for political and economic
instability.
•REIT
Investment Risk. The Fund’s investments in REITs will, among other things, be subject
to many of the same risks as a direct investment in real estate. The stock
prices of companies in the real estate industry, including REITs, are typically
sensitive to changes in real estate values, property taxes, interest rates, cash
flow of underlying real estate assets, occupancy rates, government regulations
affecting zoning, land use, and rents, as well as the management skill and
creditworthiness of the issuer.
•Exchange-Traded
Fund Risk.
The risks of owning an ETF generally reflect the risks of owning the underlying
securities they are designed to track, although lack of liquidity in an ETF
could result in it being more volatile than the underlying portfolio of
securities. Disruptions in the markets for the securities underlying ETFs
purchased or sold by the Fund could result in losses on the Fund’s investment in
ETFs. ETFs also have management fees that increase their costs versus the costs
of owning the underlying securities directly. The Fund may purchase shares of
ETFs at prices that exceed the net asset value of their underlying investments
(i.e., premium)
and may sell shares of ETFs at prices below such net asset value (i.e., discount),
and the Fund will likely incur brokerage costs when it purchases and sells ETFs.
Due to the costs of buying or selling shares, including brokerage commissions
imposed by brokers and bid-ask spreads, frequent trading of shares may
significantly reduce investment results and an investment in shares may not be
advisable for investors who
Summary
Section 32 Cromwell Foresight
Global Sustainable Infrastructure Fund
anticipate regularly making small investments. Additionally, supply
and demand for shares of an ETF or market disruptions may cause the market price
of the ETF to deviate from the value of the ETF’s investments, which may lead to
widening of the bid-ask spread quoted throughout the day and may be exacerbated
in less liquid or volatile markets.
•Other
Investment Companies Risk. Investing in other investment companies subjects the Fund to those
risks affecting the investment companies themselves, including the possibility
that the value of the underlying securities held by an investment company could
decrease or an investment company’s portfolio becomes illiquid. Additionally, an
investment company may not achieve its investment objective or execute its
investment strategy effectively, which may adversely affect the Fund’s
performance. To the extent that the Fund invests in other investment companies,
investors in the Fund will bear both their proportionate share of expenses in
the Fund and, indirectly, the expenses of the investment companies in which the
Fund invests.
•Master
Limited Partnership Risk. Investment in securities of an MLP involves risks that differ from
investments in common stock, including risks related to limited control and
limited rights to vote on matters affecting the MLP, risks related to potential
conflicts of interest between the MLP and the MLP’s general partner, cash flow
risks, dilution risks and risks related to the general partner’s right to
require unit-holders to sell their common units at an undesirable time or price.
Certain MLP securities may trade in lower volumes due to their smaller
capitalizations. Accordingly, those MLPs may be subject to more abrupt or
erratic price movements and may lack sufficient market liquidity to enable the
Fund to effect sales at an advantageous time or without a substantial drop in
price. Investment in those MLPs may restrict the Fund’s ability to take
advantage of other investment opportunities. MLPs are generally considered
interest-rate sensitive investments. During periods of interest rate volatility,
these investments may not provide attractive returns.
•MLP
Tax Risk. A change in current tax law, or a change in the business of a given
MLP, could result in an MLP being treated as a corporation or other form of
taxable entity for U.S. federal income tax purposes, which would result in the
MLP being required to pay U.S. federal income tax, excise tax or another form of
tax on its taxable income. The classification of an MLP as a corporation or
other form of taxable entity for U.S. federal income tax purposes could reduce
the amount of cash available for distribution by the MLP and could cause any
such distributions received by the Fund to be taxed as dividend income, return
of capital, or capital gain. Therefore, if any MLPs owned by the Fund were
treated as corporations or other forms of taxable entity for U.S. federal income
tax purposes, the after-tax return to the Fund with respect to its investment in
such MLPs could be materially reduced which could cause a material decrease in
the net asset value per share (“NAV”) of the Fund’s shares.
•Non-Diversified
Fund Risk. The
Fund is non-diversified and therefore a greater percentage of holdings may be
focused in a small number of issuers or a single issuer, which can place the
Fund at greater risk. Notwithstanding the Fund’s status as a “non-diversified”
investment company under the Investment Company Act of 1940, as amended (the
“1940 Act”), the Fund intends to qualify as a regulated investment company
accorded special tax treatment under the Internal Revenue Code, which imposes
its own diversification requirements that are less restrictive than the
requirements applicable to “diversified” investment companies under the 1940
Act.
•Equity
Securities Risk. Investments in common stocks and other equity securities are
particularly subject to the risk of changing economic, stock market, industry
and company conditions and the risks inherent in a portfolio manager’s ability
to anticipate such changes that can adversely affect the value of the Fund’s
holdings.
Summary
Section 33 Cromwell Foresight
Global Sustainable Infrastructure Fund
•Market
Changes Risk. The value of the Fund’s investments may change because of broad
changes in the markets in which the Fund invests, which could cause the Fund to
underperform other funds with similar objectives. From time to time, markets may
experience periods of acute stress that may result in increased volatility and
increased redemptions. Such conditions may add significantly to the risk of
volatility in the net asset value (“NAV”) of the Fund’s
shares.
•Management
Risk. Because the Fund is an actively managed investment portfolio,
security selection or focus on securities in a particular style, market sector
or group of companies may cause the Fund to incur losses or underperform
relative to its benchmarks or other funds with a similar investment objective.
There can be no guarantee that the Sub-Adviser’s investment techniques and risk
analysis will produce the desired result.
•Recent
Market Events Risk. U.S. and international markets have experienced significant periods
of volatility in recent months and years due to a number of economic, political
and global macro factors including rising inflation, the possibility of a
national or global recession, the war between Russia and Ukraine, and the
conflict between Israel and Hamas. Inflation and rapid fluctuations in inflation
rates may have negative effects on the economies and securities markets of the
United States and other countries. Pandemics and epidemics have been and can be
highly disruptive to economies and markets, adversely impacting individual
companies, sectors, industries, markets, currencies, interest and inflation
rates, credit ratings, investor sentiment, and other factors affecting the value
of the Funds’ investments. The ongoing armed conflict between Ukraine and Russia
in Europe and Israel and Hamas in the Middle East could have severe adverse
effects on the regional or global economies and the markets for certain
securities.
•Cybersecurity
Risk. With the increased use of technologies such as the Internet to
conduct business, the Fund and the Sub-Adviser are susceptible to operational,
information security, and related risks. Cyber incidents affecting the Fund, the
Sub-Adviser, or the Fund’s service providers may cause disruptions and impact
business operations, potentially resulting in financial losses, interference
with the Fund’s ability to calculate its NAV, impediments to trading, the
inability of shareholders to transact business, violations of applicable privacy
and other laws, regulatory fines, penalties, reputational damage, reimbursement
or other compensation costs, or additional compliance costs.
•Market
Disruption Risks Related to Armed Conflict. As a result of increasingly interconnected global economies and
financial markets, armed conflict between countries or in a geographic region,
for example the current conflicts between Russia and Ukraine in Europe and Hamas
and Israel in the Middle East, has the potential to adversely impact a Fund’s
investments. Such conflicts, and other corresponding events, have had, and could
continue to have, severe negative effects on regional and global economic and
financial markets, including increased volatility, reduced liquidity, and
overall uncertainty, which may result in a negative impact on Fund performance
and the value of an investment in the Fund.
Performance
When the Fund has
been in operation for a full calendar year, performance information will be
shown here.
Updated
performance information will be available on the Fund’s website at
www.thecromwellfunds.com or by calling the
Fund toll-free at 1-855-625-7333.
Summary
Section 34 Cromwell Foresight
Global Sustainable Infrastructure Fund
Management
The
Adviser
Cromwell
Investment Advisors, LLC is the Fund’s investment adviser.
The
Sub-Adviser
Foresight
Group LLP is the Fund’s investment sub-adviser.
Portfolio
Managers
The
following portfolio managers are jointly and primarily responsible for the
day-to-day management of the Fund:
Nick
Scullion, CFA®
Lead
Portfolio Manager, Foresight Sub-Adviser;
Portfolio
Manager of the Fund since inception, January 2023.
Eric
Bright, CFA®
Portfolio
Manager, Foresight Sub-Adviser;
Co-Portfolio
Manager of the Fund since inception, January 2023.
Purchase
and Sale of Fund Shares
You
may purchase or redeem shares by mail addressed to Cromwell Foresight Global
Sustainable Infrastructure Fund, c/o U.S. Bank Global Fund Services,
P.O. Box 701, Milwaukee, Wisconsin 53201-0701, by telephone at
1-855-625-7333 (toll free), on any day the New York Stock Exchange (“NYSE”) is
open for trading, or through a broker-dealer or other financial intermediary
(such as a bank) approved by the Fund (an “Authorized Intermediary”). You may
also purchase or redeem Fund shares by wire transfer. Purchases and redemptions
by telephone are permitted if you have previously established these options for
your account. Investors who wish to purchase or redeem Fund shares through an
Authorized Intermediary should contact the Authorized Intermediary directly.
Minimum
Investment Amounts
|
|
|
|
|
|
|
| |
|
Initial
Investment |
Subsequent
Investments |
Investor
Class |
| |
Regular
Accounts |
$2,000 |
$100 |
Individual
Retirement Accounts |
$1,000 |
$100 |
Institutional
Class |
| |
Regular
Accounts |
$100,000 |
$100 |
Individual
Retirement Accounts |
$25,000 |
$100 |
|
| |
|
| |
|
| |
Tax
Information
The
Fund’s distributions may be taxed as ordinary income unless you are investing
through a tax-deferred or other tax-advantaged arrangement, such as a 401(k)
plan or an IRA. A portion of the Fund’s distributions may also be taxable as
long-term capital gain. You may be taxed later upon withdrawal of monies from
such tax-deferred or other tax-advantaged arrangements.
Summary
Section 35 Cromwell Foresight
Global Sustainable Infrastructure Fund
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase Fund shares through a broker-dealer or other financial intermediary
(such as a bank), the Fund and its related companies may pay the intermediary
for the sale of Fund shares and related services. These payments may create
conflicts of interest by influencing the broker-dealer or other intermediary and
your financial professional to recommend the Fund over another investment. Ask
your financial professional or visit your financial intermediary’s website for
more information.
Summary
Section 36 Cromwell Foresight
Global Sustainable Infrastructure Fund
|
| |
Cromwell
Greenspring Mid Cap Fund |
Investment
Objective
Cromwell
Greenspring Mid Cap Fund’s
(the
“Greenspring Fund” or the “Fund”) investment objective is long-term capital
appreciation.
Fees and Expenses of the
Fund
This
table describes the fees and expenses that you may pay if you buy, hold and sell
shares of the Fund. You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and examples
below.
|
|
|
|
|
|
|
| |
Shareholder
Fees
(fees
paid directly from your investment) |
Investor
Class |
Institutional
Class |
| None |
None |
|
|
|
|
|
|
|
| |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.75% |
0.75% |
Distribution
and Service (12b-1) Fees |
0.25% |
None |
Other
Expenses |
0.39% |
0.39% |
Acquired
Fund Fees and Expenses |
0.02% |
0.02% |
Total
Annual Fund Operating Expenses(1) |
1.41% |
1.16% |
(1)Total Annual Fund Operating Expenses do not correlate to the
Ratio of Expenses to Average Net Assets found within the “Financial Highlights”
section of this Prospectus, because Acquired Fund Fees and Expenses are not
included in the ratio.
Example
This example is intended to help you compare the costs of
investing in the Fund with the cost of investing in other mutual funds. The
example assumes that you invest $10,000 in the Fund for the time periods
indicated and that you then redeem or hold all of your shares at the end of
those periods. The example also assumes that your investment has a 5% return
each year and that the Fund’s operating expenses remain the
same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| One
Year |
Three
Years |
Five
Years |
Ten
Years |
Investor
Class |
$144 |
$446 |
$771 |
$1,691 |
Institutional
Class |
$118 |
$368 |
$638 |
$1,409 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
shares are held in a taxable account. These transaction costs and potentially
higher taxes, which are not reflected in the Total Annual Fund Operating
Expenses or in the example, affect the Fund’s performance. During
the fiscal year ended
December 31, 2023,
the portfolio turnover rate of the Fund was 18% of
the average value of its portfolio.
Principal Investment
Strategies
The
Fund primarily invests in equity securities its investment sub-adviser, Corbyn
Investment Management, Inc. (the “Corbyn Sub-Adviser” or “Sub-Adviser”),
believes are undervalued at the time of purchase and have the potential to
provide capital appreciation, income, or a combination of both. Under
Summary
Section 37 Cromwell Greenspring
Mid Cap Fund
normal circumstances, the Fund invests at least 80% of its net assets
(plus borrowings for investment purposes) in equity securities of mid-sized
capitalization U.S. companies (“mid cap companies”) at time of purchase which,
for the purposes of the Fund, are those companies with market capitalizations
similar to the market capitalizations of companies listed in the Russell Midcap®
Index or the S&P MidCap 400® Index.
The
Fund’s equity securities investments may include common and preferred stocks of
United States companies.
As
of March 31, 2024, the market capitalization of companies in the Russell
Midcap®
Index ranged from approximately $0.4 billion to $89.0 billion and the
market capitalization of companies in the S&P MidCap 400®
Index ranged from approximately $1.4 billion to
$24.9 billion.
The
companies in which the Fund may invest are those the Corbyn Sub-Adviser believes
provide an attractive risk/reward value and are undervalued relative to
historical valuations, the company’s peers, or the securities market in general.
The Sub-Adviser utilizes a bottom-up, fundamental “value” investing approach.
The Sub-Adviser considers several factors, including, but not limited to, a
company’s market position, management quality, balance sheet strength, free cash
flow generation, and industry or company-specific catalysts. The Fund invests
primarily in U.S.-listed companies. The Sub-Adviser may sell a security for a
variety of reasons, including, but not limited to, when the Sub-Adviser’s
analysis indicates that (1) continued investment in the security no longer
represents a favorable risk-reward relationship; (2) a new security is
determined to have a more attractive valuation; (3) the current business,
future outlook or management of a particular company’s security has
deteriorated; or (4) general market conditions favor a
sale.
Principal
Risks
In
addition to possibly not achieving your investment goals,
you could lose money by investing in the Fund.
An
investment in the Fund is not a deposit of the bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
The
principal risks of investing in the Fund are:
•Mid-Cap
Securities Risk. Equity securities of mid-cap companies may be subject to greater
price volatility, significantly lower trading volumes, cyclical, static or
moderate growth prospects and greater spreads between their bid and ask prices
than equity securities of larger companies. Because these businesses frequently
rely on narrower product lines and niche markets, they can suffer isolated
setbacks.
•Industrial
Sector Risk.
The industrial sector can be significantly affected by, among other things,
worldwide economic growth, supply and demand for specific products and services,
rapid technological developments, international political and economic
developments, environmental issues, tariffs and trade barriers, and tax and
governmental regulatory policies. As the demand for, or prices of, industrials
increase, the value of the Fund’s investments generally would be expected to
also increase. Conversely, declines in the demand for, or prices of, industrials
generally would be expected to contribute to declines in the value of such
securities. Such declines may occur quickly and without warning and may
negatively impact the value of the Fund and your
investment.
•Recent
Market Events Risk.
U.S. and international markets have experienced significant periods of
volatility in recent months and years due to a number of economic, political and
global macro factors including rising inflation, the possibility of a national
or global recession, the war between Russia and Ukraine, and the conflict
between Israel and Hamas. Inflation and rapid fluctuations in inflation rates
may have negative effects on the economies and securities markets of the United
States and other countries. Pandemics and epidemics have been and can be highly
disruptive to economies and markets, adversely impacting individual companies,
sectors, industries, markets, currencies, interest and inflation rates, credit
ratings, investor sentiment, and other factors affecting the value of the
Summary
Section 38 Cromwell Greenspring
Mid Cap Fund
Funds’ investments. The ongoing armed conflict between Ukraine and
Russia in Europe and Israel and Hamas in the Middle East could have severe
adverse effects on the regional or global economies and the markets for certain
securities.
•Equity
Securities Risk. Investments in common stocks and other equity securities are
particularly subject to the risk of changing economic, stock market, industry
and company conditions and the risks inherent in a portfolio manager’s ability
to anticipate such changes that can adversely affect the value of the Fund’s
holdings.
•Market
Changes Risk. The value of the Fund’s investments may change because of broad
changes in the markets in which the Fund invests, which could cause the Fund to
underperform other funds with similar objectives. From time to time, markets may
experience periods of acute stress that may result in increased volatility and
increased redemptions. Such conditions may add significantly to the risk of
volatility in the net asset value (“NAV”) of the Fund’s
shares.
•Value
Investing Risk. A value stock may decrease in price or may not increase in price as
anticipated by the portfolio manager if other investors fail to recognize the
company’s value or the factors that the portfolio manager believes will cause
the stock price to increase do not occur.
•Management
Risk. Because the Fund is an actively managed investment portfolio,
security selection or focus on securities in a particular style, market sector
or group of companies may cause the Fund to incur losses or underperform
relative to its benchmarks or other funds with a similar investment objective.
There can be no guarantee that the Sub-Adviser’s investment techniques and risk
analysis will produce the desired result.
•Large-Capitalization
Stock Risk. Larger, more established companies may be unable to respond quickly
to new competitive challenges such as changes in consumer tastes or innovative
smaller competitors. Also, large-capitalization companies are sometimes unable
to attain the high growth rates of successful, smaller companies, especially
during extended periods of economic expansion.
•Preferred
Stock Risk.
Preferred stock represents an equity interest in a company that
generally entitles the holder to receive dividends and a fixed share of the
proceeds from the company’s liquidation. Preferred stock is subject to
issuer-specific and market risk applicable generally to equity securities, and
is also subject to many of the risks associated with debt securities, including
interest rate risk. The value of preferred stock may decline if dividends are
not paid. In certain situations an issuer may call or redeem its preferred stock
or convert it to common stock. The market prices of preferred stocks are
generally more sensitive to actual or perceived changes in the issuer’s
financial condition or prospects than are the prices of debt
securities.
•Other
Investment Companies Risk. Investing in other investment companies subjects the Fund to those
risks affecting the investment companies themselves, including the possibility
that the value of the underlying securities held by an investment company could
decrease or an investment company’s portfolio becomes illiquid. Additionally, an
investment company may not achieve its investment objective or execute its
investment strategy effectively, which may adversely affect the Fund’s
performance. To the extent that the Fund invests in other investment companies,
investors in the Fund will bear both their proportionate share of expenses in
the Fund and, indirectly, the expenses of the investment companies in which the
Fund invests.
Summary
Section 39 Cromwell Greenspring
Mid Cap Fund
•Cybersecurity
Risk. With the increased use of technologies such as the Internet to
conduct business, the Fund and the Sub-Adviser are susceptible to operational,
information security, and related risks. Cyber incidents affecting the Fund, the
Sub-Adviser, or the Fund’s service providers may cause disruptions and impact
business operations, potentially resulting in financial losses, interference
with the Fund’s ability to calculate its NAV, impediments to trading, the
inability of shareholders to transact business, violations of applicable privacy
and other laws, regulatory fines, penalties, reputational damage, reimbursement
or other compensation costs, or additional compliance costs.
•Market
Disruption Risks Related to Armed Conflict. As a result of increasingly interconnected global economies and
financial markets, armed conflict between countries or in a geographic region,
for example the current conflicts between Russia and Ukraine in Europe and Hamas
and Israel in the Middle East, has the potential to adversely impact a Fund’s
investments. Such conflicts, and other corresponding events, have had, and could
continue to have, severe negative effects on regional and global economic and
financial markets, including increased volatility, reduced liquidity, and
overall uncertainty, which may result in a negative impact on Fund performance
and the value of an investment in the Fund.
Performance
The bar chart demonstrates the risks of investing in the Fund
by showing changes in the Fund’s performance from year to year.
The Average Annual Total Returns table also demonstrates these risks by showing
how the Fund’s average annual returns for the 1-year, 5-year, 10-year, and since
inception periods compare with those of a broad measure of market performance.
Performance data for the classes varies based on differences in their fee and
expense structures.
Effective
August 14, 2023, Greenspring Fund, Inc. (the “Predecessor Fund”),
reorganized into the Fund (the “Reorganization”). Following the Reorganization,
the Fund made certain changes to its principal investment strategies.
Accordingly, performance information shown prior to August 14, 2023, is
based on the Predecessor Fund’s principal investment strategies, and may not be
representative of the Fund’s performance under its current principal investment
strategies. Accordingly, the returns for Institutional Class shares in the bar
chart and table are the returns of the Predecessor Fund. The Predecessor Fund
did not offer Investor Class shares. Returns of the Investor Class shares shown
in the table prior to the Reorganization reflect the returns of the
Institutional Class shares, adjusted to reflect the expenses of the Investor
Class. The performance returns for the Investor Class will be lower than those
of the Institutional Class due to the higher expenses.
The
Fund has adopted the Financial Statements of the Predecessor Fund. The
Predecessor Fund’s past performance, before and after taxes, is not necessarily
an indication of how the Fund will perform in the future.
Updated performance information is available on the Fund’s website
at
www.thecromwellfunds.com or by calling the
Fund at
1-855-625-7333 (toll
free).
Summary
Section 40 Cromwell Greenspring
Mid Cap Fund
Calendar Year Total Return
for Institutional Class Shares as of December 31
Best
Quarter: 16.94% (Quarter ended
December 31,
2020)
Worst
Quarter: -26.16% (Quarter ended
March 31,
2020)
|
|
|
|
|
|
|
|
|
|
| |
Average Annual Total Returns
(For the periods ended December 31, 2023)
|
1
Year |
5
Years |
10
Years |
Institutional
Class |
|
| |
Return
Before Taxes |
11.95% |
10.22% |
5.65% |
Return
After Taxes on Distributions |
10.13% |
8.50% |
3.87% |
Return
After Taxes on Distributions and Sale of Fund
Shares |
8.24% |
7.88% |
4.07% |
Russell
Mid Cap Index (reflects no deduction for fees, expenses, or
taxes) |
17.23% |
12.68% |
9.42% |
Russell
3000®
Value Index(1) (reflects no deduction for fees, expenses, or
taxes) |
11.66% |
10.84% |
8.28% |
(1)
Effective August 14, 2023, the Russell Mid Cap Index has
replaced the Russell 3000®
Value Index as the Fund’s primary benchmark as the Russell Mid Cap Index is more
closely aligned with the Fund’s principal investment strategies and portfolio
holdings.
After-tax returns are calculated using the highest historical
individual federal marginal income tax rates and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on your
tax situation and may differ from those shown. Furthermore, the after-tax returns shown are not relevant to
shareholders who hold their shares through tax-deferred or other tax-advantaged
arrangements, such as 401(k) plans or individual retirement accounts
(“IRAs”). After-tax
returns are shown for the Institutional Class shares only and after-tax returns
for the other classes will vary.
In certain
cases, Return After Taxes on Distributions and Sale of Fund Shares may be higher
than the other return figures for the same period when a capital loss occurs
upon the redemption of Fund shares because there is an assumed tax deduction
that benefits the investor.
Summary
Section 41 Cromwell Greenspring
Mid Cap Fund
Management
The
Adviser
Cromwell
Investment Advisors, LLC (the “Adviser”) is the Fund’s investment
adviser.
The
Sub-Adviser
Corbyn
Investment Management, Inc. is the Fund’s investment sub-adviser.
Portfolio
Managers
The
following portfolio managers are jointly and primarily responsible for the
day-to-day management of the Fund:
Charles
vK. Carlson, CFA®
President
and Director, Corbyn Sub-Adviser;
Portfolio
Manager of the Fund and the Predecessor Fund since January 1987.
Michael
Goodman, CFA®
Senior
Investment Analyst, Corbyn Sub-Adviser;
Portfolio
Manager of the Fund and the Predecessor Fund since May 2022.
Purchase
and Sale of Fund Shares
You
may purchase or redeem shares by mail addressed to Cromwell Greenspring Mid Cap
Fund, c/o U.S. Bank Global Fund Services, P.O. Box 701, Milwaukee,
Wisconsin 53201-0701, by telephone at 1-855-625-7333 (toll free), on any day the
New York Stock Exchange (“NYSE”) is open for trading, or through a broker-dealer
or other financial intermediary (such as a bank) approved by the Fund (an
“Authorized Intermediary”). You may also purchase or redeem Fund shares by wire
transfer. Purchases and redemptions by telephone are permitted if you have
previously established these options for your account. Investors who wish to
purchase or redeem Fund shares through an Authorized Intermediary should contact
the Authorized Intermediary directly.
Minimum
Investment Amounts
|
|
|
|
|
|
|
| |
|
Initial
Investment |
Subsequent
Investments |
Investor
Class |
| |
Regular
Accounts |
$2,000 |
$100 |
Individual
Retirement Accounts |
$1,000 |
$100 |
Institutional
Class |
| |
Regular
Accounts |
$100,000 |
$100 |
Individual
Retirement Accounts |
$25,000 |
$100 |
Tax
Information
The
Fund’s distributions may be taxed as ordinary income unless you are investing
through a tax-deferred or other tax-advantaged arrangement, such as a 401(k)
plan or an IRA. A portion of the Fund’s distributions may also be taxable as
long-term capital gain. You may be taxed later upon withdrawal of monies from
such tax-deferred or other tax-advantaged arrangements.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase Fund shares through a broker-dealer or other financial intermediary
(such as a bank), the Fund and its related companies may pay the intermediary
for the sale of Fund shares and related services.
Summary
Section 42 Cromwell Greenspring
Mid Cap Fund
These
payments may create conflicts of interest by influencing the broker-dealer or
other intermediary and your financial professional to recommend the Fund over
another investment. Ask your financial professional or visit your financial
intermediary’s website for more information.
Summary
Section 43 Cromwell Greenspring
Mid Cap Fund
|
| |
Investment
Strategies, Related Risks and Disclosure of Portfolio
Holdings |
Investment
Objective
The
investment objectives of the CenterSquare Fund, the Tran Fund and the
Greenspring Fund are to achieve a combination of income and long-term capital
appreciation.
The
investment objective of both the Marketfield Fund and the Foresight Fund is
capital appreciation.
Changes
in Investment Objective.
Each Fund’s investment objective is non-fundamental and may be changed without
shareholder approval upon at least 60 day prior written notice to
shareholders.
Principal
Investment Strategies
Cromwell
CenterSquare Real Estate Fund:
The
CenterSquare Fund applies fundamental investment research techniques when
deciding which securities to buy or sell. Typically, the
Fund:
•Monitors
factors such as real estate trends and industry fundamentals of real estate
sectors including office, apartment, retail, hotel, and industrial.
•Selects
stocks by evaluating each company’s real estate value, quality of its assets,
and management record for improving earnings and increasing asset value relative
to other publicly traded real estate companies.
•Sells
all or part of the Fund’s holdings in a particular security if:
—The
security appreciates to a premium relative to other real estate companies;
or
—The
anticipated return is not sufficient compared with the risk of continued
ownership.
Under
normal circumstances, the Fund invests at least 80% of its net assets, plus the
amount of any borrowings for investment purposes, in stocks of companies
principally engaged in the real estate industry, including REITs. The Fund will
provide shareholders with at least 60 days’ prior written notice of any change
in this policy.
The
Fund’s
compliance with its investment limitations and requirements described in the
Prospectus is usually determined at the time of investment. If such percentage
limitation is complied with at the time of an investment, any subsequent change
in percentage resulting from a change in values or assets, or a change in market
capitalization of a company, will not constitute a violation of that
limitation.
Cromwell
Marketfield L/S Fund:
The
Marketfield Fund seeks capital appreciation while trying to achieve volatility
generally lower than that of the broad equity market. Correlation between the
Fund and the broad equity market may vary considerably over the course of time.
To
achieve the Fund’s investment objective,
the Marketfield Sub-Adviser
employs a long/short strategy and allocates the Fund’s assets by primarily
investing in equity securities and exchange-traded funds (ETFs), while also
investing in fixed-income securities and other investment companies in
proportions consistent with the Sub-Adviser’s evaluation of their expected risks
and returns. The Fund intends to maintain a net long exposure (the market value
of long positions minus the market value of short positions) of approximately
25% to 80% of its net assets. Under normal market conditions, the Fund’s
Investment
Objectives, Strategies, Risks 44
long
positions may range from approximately 60% to 95% of its net assets and its
short positions may range from approximately 10% to 50% of its net assets.
The
Sub-Adviser notes that fixed income securities could potentially provide a
source of positive returns during an equity market correction. Additionally,
they may provide a specific opportunity during periods that the market’s
perception is changing rapidly, and provide superior risk adjusted return
opportunities to equity exposure (e.g., the
aftermath of the Financial Crisis in 2009 and the Euro crisis in 2012). During
times of rapidly rising interest rates or widening credit spreads the
implementation of short positions in fixed income may also generate positive
returns. It should be noted that due to the lower historic volatility of fixed
income compared to equities, the Adviser would typically take a larger position
to generate a similar portfolio response.
The
Sub-Adviser utilizes its own macro-economic and technical market research to
construct the Fund’s portfolio. Generally, long positions are increased during
periods in which the Sub-Adviser’s research shows a likelihood of future growth
in selected securities, and reduced when the opposite is true. Short positions
are utilized both as hedges and to capture specific risks either in the broad
equity market or specific portions of the market. The Sub-Adviser generally uses
a combination of common stocks and ETFs to generate exposure, with the latter
being used to efficiently capture broader exposure either at the sector or
geographic (country) level. The Sub-Adviser analyzes the market to determine
when allocations to fixed-income securities are appropriate.
The
Sub-Adviser,
in general, constructs the Fund’s portfolio from a top-down perspective based on
market conditions uncovered in its research. The portfolio’s allocation to any
asset class will differ over time and combination of market
condition.
The
Fund’s equity securities investments may include common and preferred stocks of
United States companies of any size. The Fund may take long and short positions
in equity securities of foreign companies of any size, including securities
issued by corporations located in developing or emerging markets. The amount of
Fund assets invested in foreign securities may vary based on market conditions.
However, under normal market conditions, the Sub-Adviser expects the Fund may
invest up to 50% of the Fund’s net assets in foreign securities, including
securities of issuers located in emerging markets. The Sub-Adviser determines
the countries considered to be emerging market countries by taking into
consideration factors such as the development of a country’s financial and
capital markets, inclusion of a country in an index representative of emerging
markets, and country classifications used by the World Bank, International
Monetary Fund or United Nations. The Fund’s investments in foreign securities
may include, but are not limited to, American Depositary Receipts (“ADRs”),
European Depositary Receipts (“EDRs”) and Global Depositary Receipts (“GDRs”).
The Fund’s investments in other investment companies, including ETFs, and
derivative type transactions will be considered “foreign” if the underlying
assets represented by the investment are determined to have exposure to foreign
securities, including emerging market securities.
The
Fund will engage in short sales of securities or other derivative type
transactions for hedging purposes to profit from an anticipated decline in the
price of the securities sold short. For speculation purposes, the Fund may also
enter into options, forward contracts, forward foreign currency contracts in
positions that it expects to appreciate or decline without regard to other
positions in the portfolio.
In
addition, the Fund may invest up to 50% of its net assets in equity or
fixed-income options, futures contracts and convertible securities and may
invest up to 30% of its net assets in interest rate, credit default, index,
equity (including total return), and currency exchange rate swap agreements. The
Fund
Investment
Objectives, Strategies, Risks 45
may
use derivatives either when they offer more attractive risk/rewards than an
outright “long” or “short” position. This typically is the case with single name
equity securities, ETFs or index options. The Fund may also use derivatives if
the instrument is generally only traded in a derivative format, such as
certificates of deposit or foreign exchanges. The Sub-Adviser shall manage the
Fund so that the Fund will not be deemed to be a “commodity pool” under the
Commodity Exchange Act.
Under
normal market conditions, the Fund’s investments in fixed-income securities
which may be of any maturation or duration, consist of investment grade
corporate bonds and debentures, mortgage-backed and asset-backed securities,
United States Treasury obligations, obligations issued by the U.S. Government
and its agencies or instrumentalities and convertible securities. The Fund may
also invest in fixed income securities of foreign issuers and governments
(including issuers in emerging markets). The Fund may invest up to 30% of its
net assets in fixed-income securities that are below investment grade. Below
investment grade securities are generally securities that receive low ratings
from independent rating agencies, such as securities rated lower than BBB- by
Standard & Poor’s Ratings Services (“S&P”) and Baa3 by Moody’s Investors
Service, Inc. (“Moody’s”), or if unrated, are determined to be of equivalent
quality by the Sub-Adviser. If independent rating agencies assign different
ratings to the same security, the Fund will use the higher rating for purposes
of determining the security’s credit quality. These investments may include
securities of varying maturities, durations and ratings, including securities
that have been rated below investment grade by an independent rating agency,
commonly referred to as “junk bonds” or “high yield bonds.” Securities that are
rated below investment grade by an independent rating agency are commonly
referred to as “high yield debt” or “junk bonds.”
When
reviewing investment opportunities for the Fund, the Sub-Adviser considers
various factors, including macroeconomic conditions, corporate earnings at a
macroeconomic level, anticipated inflation and interest rates, consumer risk and
its perception of the outlook of the capital markets as a whole. A macroeconomic
strategy focuses on broad trends and is generally distinguished from a strategy
that focuses on the prospects of particular companies or issuers. The
Sub-Adviser may allocate the Fund’s investments between equity and fixed-income
securities at its discretion, without limitation.
Security
selection for the Fund is driven by the Sub-Adviser’s top-down analysis of
economic issues, the Sub-Adviser’s perception of investor sentiment and
investment flows. Once the Sub-Adviser has identified a theme that is expected
to either benefit or disadvantage a specific sector or country, it seeks to
implement an investment strategy that is appropriate for the Fund. In some
cases, the Sub-Adviser may utilize a sector- or country-specific ETF that offers
exposure to a broad range of securities. In other situations, the Sub-Adviser
may select a single issue that is perceived by the Sub-Adviser to be
particularly germane to a specific concern or a small group of issues with
characteristics that match the goal of creating portfolio exposure to a
macroeconomic theme. The Sub-Adviser may select growth stocks or value stocks
and may choose to invest in real estate investment trusts (REITs) as it deems
appropriate.
The
Sub-Adviser may sell a security if it no longer believes the security will
contribute to meeting the investment objective of the Fund or when the security
is deemed less attractive relative to another security on a return/risk basis.
The Sub-Adviser may also sell or reduce a position in a security if it sees the
investment theme failing to materialize.
Investments
in Equity Securities.
The Fund may take both long and short positions in equity securities, including
common and preferred stock of U.S. and foreign companies (including issuers
located in emerging markets), convertible securities, depositary receipts,
warrants, rights and derivatives that are linked to equity securities. The Fund
is generally not constrained among the types of equity securities in
Investment
Objectives, Strategies, Risks 46
which
it may invest. The Fund may invest in equity securities of companies with market
capitalizations of any size. In addition to direct investments in equity
securities and other equity-linked instruments, the Fund may invest in shares of
other investment companies, including ETFs, that invest in equity securities and
other equity-linked instruments.
Investments
in Fixed-Income Securities.
The Fund may invest in fixed-income securities of U.S. and foreign issuers
(including issuers located in emerging markets), and derivatives that are linked
to fixed-income securities. “Fixed-income securities” in which the Fund may
invest include, but are not limited to, corporate bonds, convertible bonds, debt
securities and other fixed-income instruments issued by various U.S. and
non-U.S. governments (including their agencies or instrumentalities),
partnership securities, commercial and residential mortgage-backed securities,
asset backed securities, and when issued securities. These investments may
include securities of varying maturities, durations and ratings, including
securities that have been rated below investment grade by an independent rating
agency, commonly referred to as “junk bonds” or “high yield bonds.” Fixed-income
securities may also be secured or unsecured, or have various rankings (such as
senior or subordinate) to other debt securities of the same issuer. In addition
to direct investments in fixed-income securities and other instruments that are
linked to fixed-income securities, the Fund may invest in shares of other
investment companies that invest in fixed-income securities and other
instruments that are linked to fixed-income securities, including shares of
ETFs.
Investments
in Derivatives.
The Fund may invest in derivatives for hedging purposes, to maintain liquidity
or to seek total return. Derivatives have a return tied to a formula based upon
an interest rate, index, price of a security or other measurement. Derivatives
include options, futures contracts, forward foreign currency contracts, swaps
and related products.
Options.
An option is a contract in which the “holder” (the buyer) pays a certain amount
(“premium”) to the “writer” (the seller) to obtain the right, but not the
obligation, to buy from the writer (in a “call”) or sell to the writer (in a
“put”) a specific asset at an agreed upon price at or before a certain time. The
holder pays the premium at inception and has no further financial obligation.
The holder of an option-based derivative generally will benefit from favorable
movements in the price of the underlying asset but is not exposed to
corresponding losses due to adverse movements in the value of the underlying
asset. The writer of an option-based derivative generally will receive fees or
premiums but generally is exposed to losses due to changes in the value of the
underlying asset. The Fund’s investments in options may include the loss of the
entire premium and the value of the underlying asset.
Futures.
A futures contract provides for the future sale by one party and purchase by
another party of a specified amount of a specific financial instrument, index,
security or commodity for a specified price at a designated date, time and
place. An index futures contract is an agreement pursuant to which the parties
agree to take or make delivery of an amount of cash equal to the difference
between the value of the index at the close of the last trading day of the
contract and the price at which the index futures contract was originally
written. Transaction costs are incurred when a futures contract is bought or
sold and margin deposits must be maintained. A futures contract may be satisfied
by delivery or purchase, as the case may be, of the instrument, security or
commodity or by payment of the change in the cash value of the index. More
commonly, futures contracts are closed out prior to delivery by entering into an
offsetting transaction in a matching futures contract. If the offsetting
purchase price is less than the original sale price, the Fund realizes a gain;
if it is more, the Fund realizes a loss. Conversely, if the offsetting sale
price is more than the original purchase price, the Fund realizes a gain; if it
is less, the Fund realizes a loss. The transaction costs must also be included
Investment
Objectives, Strategies, Risks 47
in
these calculations. There can be no assurance, however, that the Fund will be
able to enter into an offsetting transaction with respect to a particular
futures contract at a particular time.
Forward
Foreign Currency Contracts.
A forward foreign currency contract is an agreement to purchase or sell a
specific currency at a specified future date and price agreed to by the parties
at the time of entering into the contract. The Fund may enter into forward
foreign currency exchange contracts for purposes of increasing exposure to a
foreign currency or to shift exposure to foreign currency fluctuations from one
currency to another. To the extent that it does so, the Fund will be subject to
the additional risk that the relative value of currencies will be different than
anticipated by each Sub-Adviser. The use of currency transactions can result in
the Fund incurring losses as a result of a number of factors including the
imposition of exchange controls, suspension of settlements, or the inability to
deliver or receive a specified currency.
Swaps.
Swap agreements typically are two-party contracts entered into primarily by
institutional investors for periods ranging from a few weeks to several years.
Cleared swaps are transacted through futures commission merchants that are
members of central clearinghouses with the clearinghouse serving as a central
counterparty. In a standard “swap” transaction, two parties agree to exchange
the returns (or differentials in rates of return) earned or realized on
particular predetermined investments or instruments. The gross returns to be
exchanged or “swapped” between the parties are calculated with respect to a
“notional amount” (i.e., the change in the value of a particular dollar amount
invested at a particular interest rate, in a particular foreign currency, or in
a “basket” of securities representing a particular index). The swaps market was
largely unregulated prior to the enactment of the Dodd-Frank Act. Pursuant to
rules promulgated under the Dodd-Frank Act, central clearing of swap agreements
is currently required for certain market participants trading certain
instruments, and central clearing for additional instruments is expected to be
implemented by regulators until the majority of the swaps market is ultimately
subject to central clearing.
Credit
Default Swaps.
A credit default swap is a contract between a buyer and a seller of protection
against a predefined credit event (e.g., a
ratings downgrade or default) on an underlying reference obligation, which may
be a single debt instrument or baskets or indices of securities. Credit default
swaps are used as a means of “buying” credit protection (i.e., attempting
to mitigate the risk of default or credit quality deterioration in some portion
of the Fund’s holdings) or “selling” credit protection (i.e., attempting
to gain exposure to an underlying issuer’s credit quality characteristics
without directly investing in that issuer). The Fund may be a buyer or seller of
a credit default swap. Where the Fund is a seller of credit protection, it adds
leverage to its portfolio because the Fund is subject to investment exposure on
the notional amount of the swap which would be offset to the extent of its
uncommitted cash or cash equivalents. The Fund will only sell credit protection
with respect to securities in which it would be authorized to invest
directly.
If
the Fund is a buyer of a credit default swap and no credit event occurs, the
Fund will lose its premium payment and recover nothing. However, if the Fund is
a buyer and a credit event occurs, the Fund will receive the full notional
amount, or “par value,” of the reference obligation in exchange for the
reference obligation or a payment equal to the difference in value between the
full notional amount, or “par value,” of the reference obligation and the market
value of the reference obligation. As a seller, the Fund receives a fixed rate
of income reflecting the buyer’s premium payments through the term of the
contract (typically between six months and three years), provided that there is
no credit event. If a credit event occurs, the Fund must pay the buyer the full
notional amount, or “par value,” of the reference obligation in exchange for the
reference obligation or the difference in value between the full notional
amount, or “par value,” of the reference obligation and the market value of
Investment
Objectives, Strategies, Risks 48
the
reference obligation. Credit default swaps may involve greater risks than if the
Fund had invested in the reference obligation directly. In addition to the risks
applicable to derivatives generally, credit default swaps involve special risks
because they may be difficult to value and may be more susceptible to liquidity
and credit risk.
Currencies.
The Fund may invest in securities denominated in U.S. dollars or foreign
currencies (including those of issuers located in emerging markets). In
addition, the Fund may purchase and sell foreign currencies in the spot market
or by entering into forward foreign currency contracts, and may invest in
currency futures contracts, and options on foreign currencies.
Commodity-Linked
Markets Investments.
The Fund may invest in commodity-linked instruments, including commodity-linked
swaps, futures, options and options on futures, commodity-linked debt and other
investment companies and ETFs that invest in commodity-linked instruments. The
Fund’s investments in commodity-linked instruments represent underlying tangible
assets such as oil, minerals, metals and agricultural products. In addition to
investments in commodity-linked instruments, the Fund may invest in fixed income
or equity securities of issuers that are engaged in a commodities-based industry
(such as manufacturers of mining or agricultural equipment, producers of oil or
other fossil fuels, or producers of forest products). Each Sub-Adviser shall
manage each Fund so that each Fund will not be deemed to be a “commodity pool”
under the Commodity Exchange Act.
Temporary
Strategies; Cash or Similar Investments.
For temporary defensive purposes, in response to adverse market, economic,
political, or other conditions, up to 100% of the Fund’s total assets may be
invested in high-quality, short-term debt securities and money market
instruments. For longer periods of time, the Fund may hold a substantial cash
position. These short-term debt securities and money market instruments include
shares of corporate and government money market mutual funds and U.S. Government
securities. Taking a temporary defensive position in cash or holding a large
cash position for an extended period of time may result in the Fund not
achieving its investment objective. Furthermore, to the extent that the Fund
invests in money market mutual funds for its cash position, there will be some
duplication of expenses because the Fund would bear its pro rata portion of such
money market funds’ management fees and operational expenses.
Cromwell
Tran Sustainable Focus Fund
Under
normal market conditions, the Tran Fund will invest at least 80% of its assets
in sustainable equity securities. For this purpose, the Tran Sub-Adviser defines
sustainable securities as those that score 3 or higher on its internal 5-point
ESG scale based on the evaluation of factors described below. In ranking a
company’s ESG criteria, the Sub-Adviser considers both the external impact of a
company’s product or service and the company’s internal policies, controls, and
interactions with shareholders, employees, and other stakeholders. External and
internal factors are weighted equally. The Sub-Adviser does not employ negative
screening and will consider all companies in all industries for the portfolio.
The
Sub-Adviser uses an intensive fundamental due diligence process to attempt to
identify companies that meet its proprietary investment criteria based on the
objective of preserving principal and capital appreciation. The Sub-Adviser
identifies mid- and large-cap companies that it believes have a sustainable
competitive advantage. The Sub-Adviser then evaluates the resulting universe of
companies for those that generally exhibit the following
characteristics:
•a
proven track record of financial success;
•a
consistent and sustainable high or improving return on capital;
•high
margins, strong cash flow and zero to moderate debt;
Investment
Objectives, Strategies, Risks 49
•high
barrier to entry;
•a
stable growth business with opportunity for continued growth;
•customer
focused;
•recurring
revenues;
•sustainable
products, services, and actions;
•positive
interactions with customers, employees, and communities in which businesses
operate; and
•strong
governance that is structured in the interests of shareholders.
The
Sub-Adviser then assesses the management teams of the companies that meet the
criteria detailed above. The Sub-Adviser favors management teams that, in its
estimation, are owner-oriented (minimal dilution from stock options, repurchases
stock opportunistically and empowers its employees), respected, candid,
accessible and communicative.
Consistent
with preserving capital, the Sub-Adviser intends to select investments that, in
its opinion, have low downside risk and high upside potential. Through its
investment process, the Sub-Adviser seeks to build an understanding of the
financial drivers, addressable market, competitive landscape, key risks and
uncertainties, and attractiveness of valuation. The Sub-Adviser believes that
its ESG framework can aid in identifying sustainable franchises and may, in its
view, better position the Fund to perform over the long term and through market
cycles.
The
Sub-Adviser’s internally-developed ESG framework considers environmental,
social, and governance risks and to identify potential value-creation
opportunities. Specifically, the Sub-Adviser seeks to assess an investment’s
merits through the lens of environmental, social, and governance issues by
considering the both the external impact of the product or service offered by a
company and the internal policies, controls, and interactions with shareholders,
employees, and other stakeholders.
External
factors considered include, but are not limited to:
•a
company’s contribution to climate change and goals for reaching net
zero
•impact
on natural resources
•promotion
of clean, renewable, and green activities
•product
safety and responsibility
•interaction
with the communities served by the company
•promotion
of access to information, healthcare, financing, etc.
•strength
of ESG reporting and quality of disclosures and transparency
Internal
factors considered include, but are not limited to:
•policies
and actions that promote sustainability
•footprint
of corporate facilities
•treatment
of employees
•diversity
& inclusion measures along with goals or policies for
improvement
•having
and enabling a culture of feedback
•diverse
representation on the Board of Directors and executive team
•management
alignment with shareholders
•strong
checks and balances
Investment
Objectives, Strategies, Risks 50
By
assessing positive, neutral, or negative impacts a company has on internal and
external environmental, social, and governance issues, the Sub-Adviser aims to
identify value-creating opportunities from companies that have positive impacts
and avoid value-destructing risk. The Sub-Adviser, at its discretion, may also
engage with company management and boards of directors on the topics of
governance and corporate social responsibility. In addition to the Sub-Adviser’s
internal research and proprietary ESG assessment, it also uses third-party ESG
scoring systems, including but not limited to Bloomberg, ISS and Sustainalytics,
at the Sub-Adviser’s discretion, to complement its research. The Sub-Adviser can
choose to override the third-party ESG scoring system at any time.
The
Sub-Adviser intends to purchase securities that trade at a discount to their
calculated intrinsic value, thus providing a margin of safety to the investment.
The Sub-Adviser believes the intrinsic value of a business is determined by the
future cash flows the business generates. These cash flows are a function of the
returns on invested capital and growth the company achieves. The intrinsic value
is estimated utilizing a number of methodologies, including discounted cash flow
analysis, cash flow yield and valuation multiples. The Sub-Adviser reviews the
market price of the companies of interest versus their estimate of intrinsic
value to determine which companies are attractively priced.
The
Sub-Adviser takes its role as a shareowner of these various companies seriously
and participates in shareholder proposal filings, voting proxies in accordance
with our proxy voting guidelines, and participating in the annual shareholder
meeting process. Through this effort, the Sub-Adviser seeks to encourage a
company’s management toward greater transparency, accountability, disclosure and
commitment to ESG issues.
The
Sub-Adviser may choose to sell securities from the portfolio when the
fundamentals of the company are deteriorating or when the Sub-Adviser identifies
better opportunities. If a highly-rated ESG company has realized the
Sub-Adviser’s goals and future growth slows, then the Sub-Adviser may determine
it is appropriate to sell that security. Conversely, if a poorly-rated ESG
company is relatively inexpensive, is making progress in improving their ESG
qualities and has strong growth prospects, then the Sub-Adviser may determine it
is appropriate to increase the security’s weighting in the Fund. In that regard,
the Sub-Adviser’s assessments regarding ESG factors may not be determinative,
and securities that may score poorly with respect to such factors may be
purchased and retained by the Fund while the Fund may sell or not invest in
securities that may score strongly on such factors. Securities in the Fund’s
portfolio that score poorly (i.e.,
2
or less on the Sub-Adviser’s 5-point scale) with respect to the ESG factors
described above will not be counted towards the Fund’s 80% policy. The
Sub-Adviser may evaluate relative security valuations and assess the competitive
dynamics and future opportunities for companies to determine it is preferable to
increase positions in a company that scores poorly on its ESG assessment, while
decreasing the position of a stock that scores strongly in such factors.
Cromwell
Foresight Global Sustainable Infrastructure Fund:
Under
normal circumstances, the
Foresight Fund invests at least 80% of its net assets (plus any borrowings for
investment purposes) in equity securities of sustainable infrastructure
companies. This investment policy may be changed by the Board of Trustees
without shareholder approval, but shareholders would be given at least 60 days’
written notice before any such change.
The
Fund will invest directly
in the shares of companies (including listed investment trusts, real estate
investment trusts (“REITs”), ETFs or units of master limited partnerships
(“MLPs”) that, in each case, invest in infrastructure companies and are
publicly-traded (listed) on stock exchanges in developed markets, meaning North
America, Western Europe and Asia Pacific (specifically Australia, New Zealand,
Singapore, Japan, Hong Kong); and that own and operate real infrastructure or
sustainable assets
Investment
Objectives, Strategies, Risks 51
anywhere
in the world. Such companies’ revenue streams are typically directly or
indirectly supported by long-term government or public sector contracts and
government supported initiatives.
The
Fund’s investment in infrastructure-related companies organized as MLPs may
include up to 20% of its net assets in MLPs that are not taxed as regular
corporations for U.S. federal income tax purposes. The MLPs in which the Fund
invests are publicly traded partnerships or limited liability companies engaged,
among other things, in the transportation, storage, processing, refining,
marketing, exploration, production and mining of minerals and natural resources.
MLPs are partnerships the interests of which are registered with the Securities
and Exchange Commission and are able to trade on public securities exchanges
like shares of a corporation.
The
Fund considers a company to be an infrastructure company if it derives at least
50% of its revenue or profits from the ownership or operation of infrastructure
assets, such as the physical structures, networks and systems of transportation,
energy, water and sewage, medical facilities, government facilities and
communication assets.
The
Fund defines “sustainable companies” as companies which, through both their
business operations and the impact of their products or services, have a
positive environmental and/or social effect on their stakeholders. The Fund’s
sustainability criteria states that the Fund will only invest in the shares of a
company if the Foresight Sub-Adviser, in its discretion, considers that the
company delivers a net social or environmental benefit. In determining whether a
company delivers a net social or environmental gain, the Sub-Adviser will assess
company shares based on the ten principles of the United Nations Global Compact
for business which cover areas including human rights, labor rights,
environmental safeguards and combating bribery and corruption. The Sub-Adviser
utilizes its own company research and the portfolio manager’s judgment to
determine if a company is contributing positively to sustainable development.
The Sub-Adviser may but is not obligated to consider external research from
third-party providers.
The
sustainable infrastructure companies in which the Fund invests will typically
own and operate assets in the following infrastructure subsectors: renewable
energy generation (e.g., offshore
wind, onshore wind, solar energy, and hydro-electricity), core economic
infrastructure (e.g., schools,
hospitals and transport), property with infrastructure characteristics
(e.g., social
housing and medical facilities) and digital infrastructure (e.g., data
centers and communications towers).
As
a “global” Fund, under normal market conditions, the Fund will provide exposure
to investments that are economically tied to at least three different countries,
not including the U.S. Under normal circumstances, at least 40%, unless market
conditions are not deemed favorable, in which case at least 30%, of the Fund’s
net assets will provide exposure to investments that are economically tied to
countries other than the U.S, including depositary receipts. The Fund considers
a company to be located outside the U.S. when the company’s primary listing
location or headquarters is outside of the U.S. No more than 50% of the Fund by
value will be invested in shares of companies that have a primary listing in a
single country.
The
Fund may also invest in cash for liquidity and cash flow purposes and to pay
Fund expenses and redemptions.
Sustainability
considerations play an important role in the Sub-Adviser’s stock selection
process. The Sub-Adviser uses a combination of qualitative and quantitative
measurements when determining when a company meets the sustainability criteria.
From a qualitative perspective, the Sub-Adviser’s due diligence
Investment
Objectives, Strategies, Risks 52
process
involves an initial framework driven approach assessing whether a company aligns
with the 10 principles of the UN Global Compact (“UNGC”) combined with a
qualitative assessment on whether the company’s strategy, economic activity, and
fundamental purpose help to deliver environmental or social benefits. This is
assessed on an ongoing basis through continued monitoring and engagement with
the company. Ongoing engagement with holdings includes discussions to improve
climate-related practices, change sustainability outcomes, and improve
disclosures. Furthermore, the Sub-Adviser will undertake continued engagement
with the company to ensure that the business model, sustainability strategy,
investment strategy, and risk policies continue to align with the initial
assessment. From a quantitative perspective, the Sub-Adviser may, but is not
obligated to, assess, interpret and evaluate data and analysis provided by
external research providers as part of its process. This is an important pillar
upon which assessments of the continued compliance of securities to the Fund’s
sustainability criteria is measured.
The
Sub-Adviser continuously tracks the operational performance of the Fund’s
holdings with a specific focus on impact metrics, ESG performance, and progress
against targets and goals. For this purpose, impact metrics include carbon
footprint as a proportion of enterprise value, the proportion of a company’s
activities negatively affecting biodiversity-sensitive areas, violations of the
UN Global Compact Principles, and board gender diversity. The Sub-Adviser has
developed a data-driven proprietary monitoring system which evaluates holdings
across multiple metrics and key performance indicators to enable the
identification of relative weaknesses and evaluation of progress over the
holding period. This engagement forms part of the ongoing monitoring process. If
the Sub-Adviser believes that after initial due diligence, ongoing monitoring,
and engagement a security no longer meets the threshold required to match the
Fund’s sustainability criteria, the Sub-Adviser will not make any further
investments in the company and, in an orderly fashion, will seek to sell its
investment from such a company in a controlled and orderly manner.
The
Sub-Adviser maintains a database used to monitor companies on a standalone
basis, within their sector, and relative to peers and industry leaders. Those
data points include:
•security
information,
•external
third-party ESG ratings,
•environmental
data (such as portfolio weighted carbon footprint, emissions reduction
initiatives, and waste reduction policies)
•social,
including UNGC Principles (such as Human Rights Policies, Policy Against Child
Labor, Modern Slavery Statement), human capital (such as employee engagement
surveys and whistleblowing policies), community impact, product responsibility
(such as health and safety policies and training policies)
•governance,
including Board performance and compensation for executives.
The
Sub-Adviser’s process in conducting its sustainability assessment involves:
1.Sustainability
overview
— Prepare a summary of overall due diligence findings related to sustainability
and overview of company operations.
2.United
Nations Global Compact Assessment overview
— Review evidence-based assessment of each company’s compliance with the ten
principles of the UNGC following company due diligence meetings, regulatory
filings, and review of policies and procedures.
3.Net
Social and/or Environmental Benefit overview
— Assess each asset / sector impact on the environment and society. Each asset /
sector is given a rating of “positive,” “neutral,” or “negative.” Evidence for
each assessment is provided and the weight of the asset is included in the
assessment. Percentage weightings of each asset type / sector are used to
determine net benefit.
Investment
Objectives, Strategies, Risks 53
4.Qualitative
Review overview
— Conduct a holistic review of each company’s own strategy, sustainability
integration and performance on a standalone basis, within their sector and
relative to peers and industry leaders.
5.Future
Areas to Re-assess overview
— Identify topics during due diligence for specific focus, key performance
indicators, and engagement with management.
6.Conclusion
overview
— Summarize the process and findings.
The
process above includes quantitative and qualitative inputs with the overall goal
to identify companies that meet the sustainable investment criteria of complying
with the ten UNGC principles and delivering a net environmental and/or social
benefit. Key performance indicators for individual companies may include
specific goals (e.g., a
company may commit to signing up to the UNGC and that would be a specific and
measurable KPI with a quantitative, binary outcome). Some KPIs require more
assessment and context.
The
Fund may have significant investments in securities of companies within the same
economic sector, such as the Industrials Sector. The Fund is non-diversified,
which means that it can invest a greater percentage of its assets in a small
group of issuers or in any one issuer compared to a diversified fund
can.
Cromwell
Greenspring Mid Cap Fund
The
Greenspring Fund primarily invests in equity securities the Corbyn Sub-Adviser
believes are undervalued at the time of purchase and have the potential to
provide capital appreciation, income, or a combination of both. Under normal
circumstances, the Fund invests at least 80% of its net assets (plus borrowings
for investment purposes) in equity securities of mid-sized capitalization U.S.
companies (“mid cap companies”) at time of purchase which, for the purposes of
the Fund, are those companies with market capitalizations similar to the market
capitalizations of companies listed in the Russell Midcap® Index or the S&P
MidCap 400® Index. The Fund’s equity securities investments may include common
and preferred stocks of United States companies.
As
of March 31, 2024, the market capitalization of companies in the Russell
Midcap®
Index ranged from approximately $0.4 billion to $89.0 billion and the
market capitalization of companies in the S&P MidCap 400®
Index ranged from approximately $1.4 billion to
$24.9 billion.
The
companies in which the Fund may invest are those the Corbyn Sub-Adviser believes
provide an attractive risk/reward value and are undervalued relative to
historical valuations, the company’s peers, or the securities market in general.
The Sub-Adviser utilizes a bottom-up, fundamental “value” investing approach.
The Sub-Adviser considers several factors, including, but not limited to, a
company’s market position, management quality, balance sheet strength, free cash
flow generation, and industry or company-specific catalysts. The Fund invests
primarily in U.S.-listed companies. The Sub-Adviser may sell a security for a
variety of reasons, including, but not limited to, when the Sub-Adviser’s
analysis indicates that (1) continued investment in the security no longer
represents a favorable risk-reward relationship; (2) a new security is
determined to have a more attractive valuation; (3) the current business,
future outlook or management of a particular company’s security has
deteriorated; or (4) general market conditions favor a sale.
The
Fund uses a research-intensive style of analysis in which the Sub-Adviser
searches the investment universe for securities which, based on its analysis, it
believes are undervalued or inefficiently priced. As these securities become
more “correctly” valued by the investment community, they may provide the Fund
with positive returns. The Fund may purchase relatively large positions in
securities that the Sub-Adviser believes are significantly
undervalued.
The
Fund employs a fundamental “value” investing approach when selecting the
securities it purchases. Value investing generally emphasizes securities of
companies whose stock prices, whether based on
Investment
Objectives, Strategies, Risks 54
earnings,
book value, or other financial measures, do not reflect their full economic
opportunities. The Fund’s equity investments are usually in stocks that trade at
prices that the Sub-Adviser believes represent discounts relative to (1)
historical valuations, (2) the market valuations of peers, and/or (3) the
valuations of the market as a whole. In researching investments, the Sub-Adviser
focuses on the following factors:
•Free
cash flow. Free
cash flow measures the cash-generating capability of a company by adding certain
non-cash charges (e.g., depreciation and amortization) to earnings and
subtracting recurring capital expenditures. A company’s free cash flow can be
used to expand or finance operations. Free cash flow can be used to benefit
shareholders through growth opportunities, debt reduction, stock repurchases,
and/or dividend increases.
•Financial
strength. Companies
that are well-capitalized and whose management teams can focus on
shareholder-enhancing opportunities are more likely to be successful investments
than those that need to focus on managing balance sheet structure, liquidity and
meeting debt obligations.
•Management
capability.
The Fund seeks to invest in companies whose management teams have historically
acted in the shareholders’ best interests and have managed their companies with
the goal of improving shareholder value. Often, these management teams have a
significant investment in their company’s stock, thus aligning their interests
with those of the company’s shareholders.
•Industry
and/or Company-Specific Catalysts.
Investments in companies with certain tailwinds can drive fundamental
improvement and shareholder value, independent of macroeconomic
conditions.
Temporary
Strategies; Cash or Similar Investments. For
temporary defensive purposes, in response to adverse market, economic,
political, or other conditions, up to 100% of the Fund’s total assets may be
invested in high-quality, short-term debt securities and money market
instruments. For longer periods of time, the Fund may hold a substantial cash
position. These short-term debt securities and money market instruments include
shares of corporate and government money market mutual funds and U.S. Government
securities. Taking a temporary defensive position in cash or holding a large
cash position for an extended period of time may result in the Fund not
achieving its investment objective. Furthermore, to the extent that the Fund
invests in money market mutual funds for its cash position, there will be some
duplication of expenses because the Fund would bear its pro rata portion of such
money market funds’ management fees and operational expenses.
Other
Investment Strategies and Policies
In
anticipation of or in response to adverse market or other conditions or atypical
circumstances such as unusually large cash inflows or redemptions, each Fund may
temporarily hold all or a portion of its assets in U.S. Government securities,
money market funds, cash or cash equivalents. The Adviser will determine when
market conditions warrant temporary defensive measures. Under such conditions,
the applicable Fund may not invest in accordance with its investment objective
or principal investment strategy and may not achieve its investment
objective.
Principal
Risks
Before
investing in the Funds, you should carefully consider your own investment goals,
the amount of time that you are willing to leave your money invested and the
amount of risk that you are willing to take. In addition to possibly not
achieving your investment goals, you
could lose money by investing in the Funds.
Information about the Funds’ objective, principal investment strategies,
investment practices and principal risks appears at the beginning of this
Prospectus. Additional information about the investment practices of the Funds
and risks pertinent to these practices is included in the Statement of
Additional Information (“SAI”). The information below describes in greater
detail the other risks pertinent to the
Investment
Objectives, Strategies, Risks 55
Funds.
The Funds’ principal risks are presented in alphabetical order to facilitate
finding particular risks and comparing them with other funds. Each risk
summarized below is considered a “principal risk” of investing in the Funds,
unless stated otherwise, regardless of the order in which it appears.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
CenterSquare |
Marketfield |
Tran |
Foresight |
Greenspring |
Changing
Distribution Level Risk |
X |
|
|
| |
Convertible
Securities Risk |
|
X |
|
| |
Cybersecurity
Risk |
X |
X |
X |
X |
X |
Debt
or Fixed-Income Securities Risk |
|
X |
|
| |
Depositary
Receipts Risk |
|
X |
| X |
|
Derivatives
Risk |
|
X |
|
| |
Emerging
Markets Risk |
|
X |
|
| |
Equity
Securities Risk |
X |
X |
X |
X |
X |
ESG
Strategy Risk |
|
|
X |
| |
Exchange-Traded
Fund Risk |
X |
X |
|
X |
|
Foreign
Securities Risk |
|
X |
|
X |
|
Growth
Stocks Risk |
|
X |
|
| |
High
Portfolio Turnover Rate Risk |
X |
|
|
| |
High
Yield Securities Risk |
|
X |
|
| |
Industrial
Sector Risk |
|
|
|
X |
X |
Information
Technology Sector Risk |
|
| X |
X |
|
Infrastructure
Companies Risk |
|
|
|
X |
|
IPO
Risk |
X |
|
|
| |
Large-Capitalization
Stock Risk |
X |
X |
X |
|
X |
Liquidity
Risk |
|
X |
|
| |
Listed
Investment Trusts Risk |
|
|
|
X |
|
Macroeconomic
Strategy Risk |
|
X |
|
| |
Management
Risk |
X |
X |
X |
X |
X |
Market
Changes Risk |
X |
X |
X |
X |
X |
Market
Disruption Risks Related to Armed Conflict |
X |
X |
X |
X |
X |
Master
Limited Partnership Risk |
|
|
|
X |
|
Mid-Capitalization
Stock Risk |
|
|
X |
|
X |
MLP
Tax Risk |
|
|
|
X |
|
Mortgage-Related
and Asset-Backed Securities Risk |
|
X |
|
| |
Non-Diversified
Fund Risk |
X |
| X |
X |
|
Other
Investment Companies Risk |
|
X |
|
X |
X |
Preferred
Stock Risk |
|
|
|
|
X |
Real
Estate Industry Risk |
X |
|
|
| |
Recent
Market Events Risk |
X |
X |
X |
X |
X |
REIT
Investment Risk |
|
X |
|
X |
|
Investment
Objectives, Strategies, Risks 56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
CenterSquare |
Marketfield |
Tran |
Foresight |
Greenspring |
Risk
of Focusing Investment on Region or Country |
|
|
|
X |
|
Sector
Risk |
|
|
X |
| |
Short
Selling Risk |
|
X |
|
| |
Small-
and Mid-Capitalization Stock Risk |
X |
X |
|
| |
Sovereign
Debt Obligations Risk |
|
X |
|
| |
Sustainable
Considerations Risk |
|
| X |
X |
|
Tax
Risk |
|
X |
|
| |
U.S.
Government Securities Risk |
|
X |
|
| |
U.S.
Treasury Obligations Risk |
|
X |
|
| |
Value
Investing Risk |
|
X |
X |
|
X |
Changing
Distribution Level Risk. The
Fund will normally receive income which may include interest, dividends and/or
capital gains, depending upon its investments. The distribution amount paid by
the
Fund will vary and generally depends on the amount of income the
Fund earns (less expenses) on its portfolio holdings, and capital gains or
losses it recognizes. A decline in the
Fund’s income or net capital gains arising from its investments may reduce its
distribution level.
Convertible
Securities Risk.
Convertible securities, until converted, have the same general characteristics
as debt securities insofar as they generally provide a stable stream of income
with generally higher yields than those of equity securities of the same or
similar issuers. By permitting the holder to exchange an investment for common
stock or the cash value of a security or a basket or index of securities,
convertible securities may also enable the investor to benefit from increases in
the market price of the underlying securities. Therefore, convertible securities
generally offer lower interest or dividend yields than non-convertible
securities of similar quality.
Cybersecurity
Risk.
With
the increased use of technologies such as the Internet to conduct business, each
Fund and each Sub-Adviser are susceptible to operational, information security,
and related risks. In general, cyber incidents can result from deliberate
attacks or unintentional events. Cyber attacks include, but are not limited to,
gaining unauthorized access to digital systems (e.g.,
through “hacking” or malicious software coding) for purposes of misappropriating
assets or sensitive information, corrupting data, or causing operational
disruption. Cyber attacks may also be carried out in a manner that does not
require gaining unauthorized access, such as causing denial-of-service attacks
on websites (i.e.,
efforts to make network services unavailable to intended users). Cyber incidents
affecting each Fund, each Sub-Adviser, or each Fund’s service providers may
cause disruptions and impact business operations, potentially resulting in
financial losses, interference with a Fund’s ability to calculate its NAV,
impediments to trading, the inability of shareholders to transact business,
violations of applicable privacy and other laws, regulatory fines, penalties,
reputational damage, reimbursement or other compensation costs, or additional
compliance costs. Similar adverse consequences could result from cyber incidents
affecting issuers of securities in which each Fund invests, counterparties with
which a Fund engages in transactions, governmental and other regulatory
authorities, exchange and other financial market operators, banks, brokers,
dealers, insurance companies and other financial institutions (including
financial intermediaries and service providers for shareholders) and other
parties. In addition, substantial costs may be incurred in order to prevent any
cyber incidents in the future. While the Funds’ service providers have
established business continuity plans in the event of, and risk management
systems to prevent, such cyber incidents, there are inherent limitations in such
plans and systems, including the
Investment
Objectives, Strategies, Risks 57
possibility
that certain risks have not been identified. Furthermore, each Fund cannot
control the cyber security plans and systems put in place by its service
providers or any other third parties whose operations may affect a Fund or its
shareholders. As a result, each Fund and their shareholders could be negatively
impacted.
Debt
or Fixed-Income Securities Risk.
Investors buy debt securities, also referred to as fixed-income securities,
primarily to profit through interest payments. Governments, banks and companies
raise cash by issuing or selling debt securities to investors. Debt securities
may be bought directly from those issuers or in the secondary trading markets.
There are many different types of debt securities, including (without
limitation) bonds, notes, and debentures.
Interest
on debt securities may be paid at different intervals. Some debt securities do
not make regular interest payments, but instead are initially sold at a discount
to the principal amount that is to be paid at maturity.
The
risks involved with investing in debt securities include (without limitation):
•Credit
risk: The purchaser of a debt security lends money to the issuer of that
security. If the issuer does not pay back the loan, the holder of the security
may experience a loss on its investment.
•Maturity
risk: A debt security with a longer maturity may fluctuate in value more than a
debt security with a shorter maturity. Therefore, the NAV of the Fund that holds
debt securities with a longer average maturity may fluctuate in value more than
the NAV of the Fund that holds debt securities with a shorter average
maturity.
•Market
risk: Like other securities, debt securities are subject to the forces of supply
and demand. Low demand may negatively impact the price of a debt
security.
•Interest
rate risk: The value of debt securities usually changes when interest rates
change. Generally, when interest rates go up, the value of a debt security goes
down and when interest rates go down, the value of a debt security goes up.
Debt
securities rated below investment grade by an independent rating agency, such as
S&P or Moody’s, are considered to have speculative characteristics and some
may be commonly referred to as “junk bonds.” Junk bonds entail default and other
risks greater than those associated with higher-rated securities.
The
duration of a bond or mutual fund portfolio is an indication of sensitivity to
changes in interest rates. For example, a duration of “three” means that a
bond’s price would be expected to decrease by approximately 3% with a 1%
increase in interest rates. In general, the longer the Fund’s duration, the more
it will react to changes in interest rates and the greater the risk and return
potential. Duration takes into account a security’s cash flows over time,
including the possibility that a security might be prepaid by the issuer or
redeemed by the holder prior to its stated maturity date. In contrast, maturity
measures only the time until final payment is due.
A
laddered maturity schedule means a portfolio is structured so that a certain
percentage of the securities will mature each year. This helps the Fund manage
duration and risk, and attempts to create a more consistent return.
Depositary
Receipts Risk.
The Fund may invest in securities of non-U.S. issuers directly or in the form of
American Depositary Receipts (“ADRs”), European Depositary Receipts (“EDRs”) and
Global
Investment
Objectives, Strategies, Risks 58
Depositary
Receipts (“GDRs”) or other similar securities representing ownership of
securities of non-U.S. issuers held in trust by a bank, exchange or similar
financial institution. These securities may not necessarily be denominated in
the same currency as the securities they represent. Designed for use in United
States, European and international securities markets, as applicable, ADRs, EDRs
and GDRs are alternatives to the purchase of the underlying securities in their
national markets and currencies, but are subject to the same risks as the
non-U.S. securities to which they relate.
ADRs
are receipts typically issued by a U.S. bank or trust company which
evidence ownership of underlying securities issued by a foreign corporation.
EDRs are receipts issued in Europe typically by non-U.S. banking and trust
companies that evidence ownership of either foreign or U.S. securities.
GDRs are receipts issued by either a U.S. or non-U.S. banking institution
evidencing ownership of the underlying non-U.S. securities. Generally, ADRs, in
registered form, are designed for use in U.S. securities markets, and EDRs and
GDRs are designed for use in European and international securities markets. An
ADR, EDR or GDR may be denominated in a currency different from the currency in
which the underlying foreign security is denominated.
Derivatives
Risk.
The Fund may enter into derivative transactions, or “derivatives,” which may
include options, forwards, futures, options on futures and swap agreements. The
value of derivatives is based on certain underlying equity or fixed-income
securities, interest rates, currencies or indices. The use of these transactions
is a highly specialized activity that involves investment techniques, tax
planning and risks that are different from those of ordinary securities
transactions. Derivatives may be hard to sell at an advantageous price or time
and typically are very sensitive to changes in the underlying security, interest
rate, currency or index. As a result, derivatives can be highly volatile. If the
Sub-Adviser is incorrect about its expectations of changes to the underlying
securities, interest rates, currencies, indices or market conditions, the use of
derivatives could result in a loss, which in some cases may be unlimited. When
using derivatives, there is a risk that the Fund will lose money if the contract
counterparty does not make the required payments or otherwise fails to comply
with the terms of the contract. In the event of the bankruptcy or insolvency of
a counterparty, the Fund could experience the loss of some or all of its
investment in a derivative or experience delays in liquidating its positions,
including declines in the value of its investment during the period in which the
Fund seeks to enforce its rights, and an inability to realize any gains on its
investment during such period. The Fund may also incur fees and expenses in
enforcing its rights. In addition, certain derivative transactions can result in
leverage. Leverage involves investment exposure in an amount exceeding the
initial investment. Leverage can cause increased volatility by magnifying gains
or losses. Investments in derivatives may increase or accelerate the amount of
taxable income of the Fund or result in the deferral of losses that would
otherwise be recognized by the Fund in determining the amount of dividends
distributable to shareholders.
Emerging
Markets Risk.
The risks of foreign investments are usually much greater when they are made in
emerging markets. Investments in emerging markets may be considered speculative.
Emerging markets are riskier than more developed markets because they tend to
develop unevenly and may never fully develop. They are more likely to experience
high rates of inflation and currency devaluations, which may adversely affect
returns. In addition, many emerging markets have far lower trading volumes and
less liquidity than developed markets. Since these markets are often small, they
may be more likely to suffer sharp and frequent price changes or long-term price
depression because of adverse publicity, investor perceptions or the actions of
a few large investors. In addition, traditional measures of investment value
used in the U.S., such as price to earnings ratios, may not apply to certain
emerging markets. Also, there may be less publicly available information about
issuers in emerging markets than would be available about issuers in more
developed capital markets, and such issuers may not be subject to accounting,
Investment
Objectives, Strategies, Risks 59
auditing
and financial reporting standards and requirements comparable to those to which
companies in developed countries are subject.
Many
emerging markets have histories of political instability and abrupt changes in
policies. As a result, their governments may be more likely to take actions that
are hostile or detrimental to private enterprise or foreign investment than
those of more developed countries, including expropriation of assets,
confiscatory taxation or unfavorable diplomatic developments. Some emerging
countries have pervasive corruption and crime that may hinder investments.
Certain emerging markets may also face other significant internal or external
risks, including the risk of war, and ethnic, religious and racial conflicts. In
addition, governments in many emerging market countries participate to a
significant degree in their economies and securities markets, which may impair
investment and economic growth. National policies that may limit the Fund’s
investment opportunities include restrictions on investment in issuers or
industries deemed sensitive to national interests.
Emerging
markets may also have differing legal systems and the existence or possible
imposition of exchange controls, custodial restrictions or other laws or
restrictions applicable to investments differ from those found in more developed
markets. Sometimes, they may lack, or be in the relatively early development of,
legal structures governing private and foreign investments and private property.
In addition to withholding taxes on investment income, some emerging market
countries may impose different capital gains taxes on foreign investors.
Emerging markets have differences in regulatory, accounting, auditing, and
financial reporting and recordkeeping standards which could impede the Adviser’s
ability to evaluate local companies, or impact the Fund’s performance. Within
Emerging Markets, rights and remedies available to the Fund, individually or in
combination with other shareholders against portfolio companies could be limited
severely.
Practices
in relation to settlement of securities transactions in emerging market
countries involve higher risks than those in developed markets, in part because
the Fund will need to use brokers and counterparties that are less well
capitalized, and custody and registration of assets in some countries may be
unreliable. The possibility of fraud, negligence, undue influence being exerted
by the issuer or refusal to recognize ownership exists in some emerging markets,
and, along with other factors, could result in ownership registration being
completely lost. The Fund would absorb any loss resulting from such registration
problems and may have no successful claim for compensation. In addition,
communications between parties in the U.S. and parties in emerging market
countries may be unreliable, increasing the risk of delayed settlements or
losses of security certificates.
Equity
Securities Risk.
Publicly held corporations may raise needed cash by issuing or selling equity
securities to investors. When each Fund buys the equity securities of a
corporation it becomes a part owner of the issuing corporation. Equity
securities may be bought on domestic stock exchanges, foreign stock exchanges,
or in the over-the-counter market. There are many different types of equity
securities, including (without limitation) common stocks, preferred stocks,
ADRs, and real estate investment trusts.
Investors
buy equity securities to make money through dividend payments and/or selling
them for more than they paid. The risks involved with investing in equity
securities include (without limitation):
•Changing
economic conditions: Equity securities may fluctuate as a result of general
economic conditions, including changes in interest rates.
•Industry
and company conditions: Certain industries or individual companies may come in
and out of favor with investors. In addition, changing technology and
competition may make the equity securities of a company or industry more
volatile.
Investment
Objectives, Strategies, Risks 60
•Security
selection: A portfolio manager may not be able to consistently select equity
securities that appreciate in value or anticipate changes that can adversely
affect the value of each Fund’s holdings. Investments in smaller and mid-size
companies may be more volatile than investments in larger companies.
ESG
Strategy Risk. The
Sub-Adviser’s consideration of ESG criteria in its investment process could
cause the Fund to forgo investment opportunities available to funds not using
these criteria and underperform such funds. The Sub-Adviser’s determination of
what constitutes ESG criteria and its process to evaluate the ESG criteria may
differ from other investment advisers. Further, there can be no assurance that
the ESG criteria utilized by the sub-advisers or any judgment exercised by the
sub-advisers will reflect the beliefs or values of any particular investor. An
independent third-party ESG data provider’s assessment of the financial
materiality of ESG factors could be inaccurate, and the provider could delay ESG
data delivery and evaluation (e.g., changing
geo-political risks that may impact involvement in one or more excluded
activity), which may have an adverse impact on the Fund’s performance or cause
the Fund to hold a security that might be ranked low from an environmental,
social or governance perspective, or its methodology could be based on a
methodology or perspective different from another provider’s. Because the
methodologies for providers are different, if one of the third-party ESG data
providers were to be replaced, the Fund’s portfolio could look different.
Application of the ESG criteria may also affect the Fund’s exposure to certain
sectors or types of investments and may impact the Fund’s relative investment
performance depending on whether such sectors or investments are in or out of
favor in the market. Given that the ESG criteria is qualitative and subjective
by nature, there can be no assurance that the ESG criteria utilized by the
sub-adviser or any judgment exercised by the sub-adviser will reflect the
beliefs or values of any particular investor. Given the subjective nature of ESG
criteria, it is also possible that the ESG exclusions and metrics screens may
not always be effective in screening out all ESG issues that an issuer might
have. In addition, regulations and industry practices related to ESG are
evolving rapidly, and the sub-adviser’s practices may change if required to
comply with such regulations or adopt such practices.
Exchange-Traded
Fund Risk.
To the extent each Fund may invest in securities of other investment companies,
a Fund may invest in shares of ETFs. ETFs are investment companies that trade
like stocks. The price of an ETF is derived from and based upon the securities
held by the ETF. However, like stocks, shares of ETFs are not traded at NAV, but
may trade at prices above or below the value of their underlying portfolios. The
level of risk involved in the purchase or sale of an ETF is similar to the risk
involved in the purchase or sale of a traditional common stock, except that the
pricing mechanism for an ETF is based on a basket of securities. Thus, the risks
of owning an ETF generally reflect the risks of owning the underlying securities
they are designed to track, although lack of liquidity in an ETF could result in
it being more volatile than the underlying portfolio of securities. Disruptions
in the markets for the securities underlying ETFs purchased or sold by each Fund
could result in losses on a Fund’s investment in ETFs. ETFs are subject to
management fees and other fees that may increase their costs versus the costs of
owning the underlying securities directly. Each Fund may from time to time
invest in ETFs, primarily as a means of gaining exposure for its portfolio to
the market without investing in individual securities, particularly in the
context of managing cash flows into a Fund.
Each
Fund may rely on Rule 12d1-4 of the 1940 Act, which allows a fund to invest in
other funds, including ETFs, in excess of the limits imposed by Section 12(d)(1)
of the 1940 Act, subject to certain conditions specified in the
Rule.
Foreign
Securities Risk.
Generally, foreign securities are issued by companies organized outside the U.S.
and are traded primarily in markets outside the U.S., but foreign debt
securities may be traded on bond
Investment
Objectives, Strategies, Risks 61
markets
or over-the-counter markets in the U.S. Foreign securities may be more difficult
to sell than U.S. securities. Investments in foreign securities may involve
difficulties in receiving or interpreting financial and economic information,
possible imposition of taxes, higher brokerage and custodian fees, possible
currency exchange controls or other government restrictions, including possible
seizure or nationalization of foreign deposits or assets. Foreign securities may
also be less liquid and more volatile than U.S. securities. Companies in many
foreign markets are not subject to the same degree of regulatory requirements,
accounting standards or auditor oversight as companies in the U.S., and as a
result, information about the securities in which each Fund invests may be less
reliable or complete. Similarly, there may also be difficulty in invoking legal
protections across borders. Increased interconnectivity of world economies and
financial markets increases the possibility that adverse developments and
conditions in one country or region will affect the stability of economies and
financial markets in other countries or regions. In addition, investments in
emerging market countries present risks to a greater degree than those presented
by investments in countries with developed securities markets and more advanced
regulatory systems. See “Emerging Markets Risk” above.
Many
of the foreign securities in which each Fund invests will be denominated or
quoted in a foreign currency. Changes in foreign currency exchange rates will
affect the value of securities denominated or quoted in foreign currencies.
Exchange rate movements can be large and can endure for extended periods of
time, and may unfavorably affect the value of each Fund’s assets. However, each
Fund may engage in foreign currency transactions to attempt to protect itself
against fluctuations in currency exchange rates in relation to the U.S. dollar.
Growth
Stocks Risk.
The Fund may invest in equity securities of companies that a portfolio manager
believes will experience relatively rapid earnings growth. Such “growth stocks”
typically trade at higher multiples of current earnings than other securities.
Therefore, the values of growth stocks may be more sensitive to changes in
current or expected earnings than the values of other securities.
The
principal risk of investing in growth stocks is that investors expect growth
companies to increase their earnings at a certain rate that is generally higher
than the rate expected for non-growth companies. If these expectations are not
met, the market price of the stock may decline significantly, even if earnings
showed an absolute increase. Growth stocks also typically lack the dividend
yield that can cushion stock prices in market downturns.
High
Portfolio Turnover Rate Risk. The
Fund may have a relatively high turnover rate compared to many mutual funds. A
high portfolio turnover rate (100% or more) has the potential to result in
increased brokerage transaction costs which may lower the
Fund’s returns. Furthermore, a high portfolio turnover rate may result in the
realization by the
Fund, and distribution to shareholders, of a greater amount of capital gains,
including short-term capital gains, than if the
Fund had a low portfolio turnover rate. Distributions to shareholders of
short-term capital gains are taxed as ordinary income under federal income tax
laws. This could result in a higher tax liability and may lower an investor’s
after-tax return.
High
Yield Securities Risk. High-yield
or non-investment grade securities (commonly referred to as “junk bonds”) are
typically rated below investment grade by one or more independent rating
agencies, such as S&P or Moody’s, or, if not rated, are determined to be of
equivalent quality by the Sub-Adviser and are sometimes considered speculative.
Investments
in high-yield securities involve special risks in addition to the risks
associated with investments in higher rated securities. High-yield securities
may be regarded as predominantly speculative with respect to the issuer’s
continuing ability to meet principal and interest payments.
Investment
Objectives, Strategies, Risks 62
Moreover,
such securities may, under certain circumstances, be less liquid than higher
rated securities. In times of unusual or adverse market, economic or political
conditions, these securities may experience higher than normal default rates.
Industrial
Sector Risk.
The value of securities issued by companies in the industrials sector may be
adversely affected by supply and demand related to their specific products or
services and industrials sector products in general. The products of
manufacturing companies may face obsolescence due to rapid technological
developments and frequent new product introduction. Government regulations,
world events, economic conditions and exchange rates may adversely affect the
performance of companies in the industrials sector. Companies in the industrials
sector may be adversely affected by liability for environmental damage and
product liability claims. The industrials sector may also be adversely affected
by changes or trends in commodity prices, which may be influenced by
unpredictable factors. Companies in the industrials sector, particularly
aerospace and defense companies, may also be adversely affected by government
spending policies because companies involved in this sector rely to a
significant extent on government demand for their products and
services.
Information
Technology Sector Risk.
Companies in the information technology sector may be adversely affected by the
failure to obtain, or delays in obtaining, financing or regulatory approval,
intense competition, both domestically and internationally, product
compatibility, consumer preferences, corporate capital expenditure, rapid
obsolescence and competition for the services of qualified personnel. Companies
in the information technology sector also face competition or potential
competition with numerous alternative technologies. In addition, the highly
competitive information technology sector may cause the prices for these
products and services to decline in the future.
Information
technology companies may have limited product lines, markets, financial
resources or personnel. Companies in the information technology sector are
heavily dependent on patent and intellectual property rights. The loss or
impairment of these rights may adversely affect the profitability of these
companies.
The
information technology sector is subject to rapid and significant changes in
technology that are evidenced by the increasing pace of technological upgrades,
evolving industry standards, ongoing improvements in the capacity and quality of
digital technology, shorter development cycles for new products and
enhancements, developments in emerging wireless transmission technologies and
changes in customer requirements and preferences. The success of sector
participants depends substantially on the timely and successful introduction of
new products.
Infrastructure
Companies Risk. Infrastructure
companies may be subject to a variety of factors that may adversely affect their
business or operations, including high interest costs in connection with capital
construction programs, high leverage, costs associated with environmental and
other regulations, the effects of economic slowdown, surplus capacity, increased
competition from other providers of services, uncertainties concerning the
availability of fuel at reasonable prices, the effects of energy conservation
policies and other factors. Some of the specific risks that infrastructure
companies may be particularly affected by, or subject to, include the following:
regulatory risk, technology risk, regional or geographic risk, natural disasters
risk, through-put risk, project risk, strategic asset risk, operation risk,
customer risk, interest rate risk, inflation risk and financing risk.
In
particular, the operations of infrastructure projects are exposed to unplanned
interruptions caused by significant catastrophic events, such as cyclones,
earthquakes, landslides, floods, explosion, fire, terrorist attack, major plant
breakdown, pipeline or electricity line rupture or other disaster. Operational
Investment
Objectives, Strategies, Risks 63
disruption,
as well as supply disruption, could adversely impact the cash flows available
from these assets.
Further,
national and local environmental laws and regulations affect the operations of
infrastructure projects. Standards are set by these laws and regulations are
imposed regarding certain aspects of health and environmental quality, and they
provide for penalties and other liabilities for the violation of such standards,
and establish, in certain circumstances, obligations to remediate and
rehabilitate current and former facilities and locations where operations are,
or were, conducted. These laws and regulations may have a detrimental impact on
the financial performance of infrastructure projects.
Other
factors that may affect the operations of infrastructure companies include
difficulty in raising capital in adequate amounts on reasonable terms in periods
of high inflation and unsettled capital markets, inexperience with and potential
losses resulting from a developing deregulatory environment, increased
susceptibility to terrorist acts or political actions, and general changes in
market sentiment towards infrastructure assets.
IPO
Risk.
The prices of securities purchased in IPOs can be very volatile and tend to
fluctuate more widely than securities of companies that have been publicly
traded for a longer period of time. Securities purchased in IPOs generally do
not have a trading history, and information about the issuers of such securities
may be available for very limited periods. The effect of IPOs on the Fund’s
performance depends on a variety of factors, including the number of IPOs the
Fund invests in relative to the size of the Fund and whether and to what extent
a security purchased in an IPO appreciates or depreciates in value. As the
Fund’s asset base increases, IPOs often have a diminished effect on such Fund’s
performance.
Large-Capitalization
Stock Risk. Large-capitalization
companies tend to compete in mature product markets and do not typically
experience the level of sustained growth of smaller companies and companies
competing in less mature product markets. Also, large-capitalization companies
may be unable to respond as quickly as smaller companies to competitive
challenges or changes in business, product, financial, or other market
conditions. For these and other reasons, a fund that invests in
large-capitalization companies may underperform other stock funds (such as funds
that focus on the stocks of small- and medium- capitalization companies) when
stocks of large-capitalization companies are out of favor.
Liquidity
Risk.
Liquidity risk exists when particular investments are difficult to purchase or
sell, possibly preventing the Fund from selling these illiquid investments at an
advantageous time or price. Generally, funds with principal investment
strategies that involve securities of companies with smaller market
capitalizations, foreign securities, derivatives or securities with substantial
market and/or credit risk tend to have the greatest exposure to liquidity risk.
Listed
Investment Trusts Risk. Listed
investment trusts are investment vehicles organized as trusts that issue a fixed
number of shares in an initial public offering, after which their shares
trade
at market value on an exchange. The
net asset value of an investment trust fluctuates due to the valuation changes
of the investment securities or assets held by the investment trust (assets
denominated in foreign currencies are also subject to the exchange rate
fluctuations subject to hedging strategy). However, because
the shares of a listed investment trust trade at market value on an exchange,
such shares can trade below their net asset value (known as a discount) or above
net asset value (known as a premium). The
more an investment trust falls out of favor and the less demand there is for its
shares, the lower the price those selling shares of the trust may have to accept
in order to liquidate their position; conversely, purchasers of shares may take
advantage of such discount. Current market uncertainty has pushed investment
trusts to the widest discounts in years, and there is a risk that such discounts
may continue to widen after the Fund has made
Investment
Objectives, Strategies, Risks 64
an
investment. Investment trusts that trade at a discount are not typically able to
issue new shares to invest in new assets or securities and may not succeed in
conducting accretive investment activity for growth. In addition to these risks,
when the Fund invests in a listed investment trust it is subject to the risks
described herein with respect to investments in other investment companies
generally, including that shareholders of the Fund will indirectly bear their
proportionate share of fees and expenses of the investment trust, as well as
commissions in connection with its purchase and sale of shares.
Macroeconomic
Strategy Risk.
The investment strategies of the Fund rely on, among other things, the
Sub-Adviser’s assessment of macroeconomic conditions and trends across multiple
geographies and asset classes. As such, the success of the investment strategies
of the Fund depends, in part, on the accuracy of the Sub-Adviser’s assessment of
macroeconomic conditions and trends. Macroeconomic conditions may include, among
others, unanticipated changes in economic and political conditions, corporate
profits and other business related indicators, inflation and interest rate
levels and performance of broad markets across asset classes.
Management
Risk.
The investment strategies, practices and risk analysis used by each Sub-Adviser
may not produce the desired results. The ability of each Fund to meet its
investment objective is directly related to each Sub-Adviser’s investment
strategies for a Fund. The value of your investment in a Fund may vary with the
effectiveness of the respective Sub-Adviser’s research, analysis and asset
allocation among portfolio securities. If the Sub-Adviser to your Fund’s
investment strategies do not produce the expected results, your investment could
be diminished or even lost.
Various
techniques can be used to increase or decrease each Fund’s exposure to changing
security prices, interest rates, currency exchange rates, commodity prices or
other factors that affect security values. These techniques may involve
derivative transactions such as buying and selling futures contracts and options
on futures contracts, entering into foreign currency transactions (such as
foreign currency forward contracts and options on foreign currencies) and
purchasing put or call options on securities and securities indices.
These
practices can be used in an attempt to adjust the risk and return
characteristics of each Fund’s portfolio of investments. For example, to gain
exposure to a particular market, a Fund may be able to purchase a futures
contract with respect to that market. The use of such techniques in an attempt
to reduce risk is known as “hedging.” If a Sub-Adviser judges market conditions
incorrectly or employs a strategy that does not correlate well with the Fund’s
investments, these techniques could result in a loss, which in some cases may be
unlimited, regardless of whether the intent was to reduce risk or increase
return. These techniques may increase the volatility of the applicable Fund and
may involve a small investment of cash relative to the magnitude of the risk
assumed. In addition, these techniques could result in a loss if the
counterparty to the transaction does not perform as promised.
Market
Changes Risk.
The value of a Fund’s investments may change because of broad changes in the
markets in which the Fund invests, which could cause the Fund to underperform
other funds with similar objectives. From time to time, markets may experience
periods of acute stress that may result in increased volatility and increased
redemptions. Such conditions may add significantly to the risk of volatility in
the NAV of a Fund’s shares.
Market
Disruption Risks Related to Armed Conflict.
As a result of increasingly interconnected global economies and financial
markets, armed conflict between countries or in a geographic region, for example
the current conflicts between Russia and Ukraine in Europe and Hamas and Israel
in the Middle East, has the potential to adversely impact a Fund’s investments.
Such conflicts, and other corresponding events, have had, and could continue to
have, severe negative effects on regional and global economic and
Investment
Objectives, Strategies, Risks 65
financial
markets, including increased volatility, reduced liquidity, and overall
uncertainty. The negative impacts may be particularly acute in certain sectors.
The timing and duration of such conflicts, resulting sanctions, related events
and other implications cannot be predicted. The foregoing may result in a
negative impact on Fund performance and the value of an investment in a Fund,
even beyond any direct investment exposure the Fund may have to issuers located
in or with significant exposure to an impacted country or geographic
regions.
Master
Limited Partnership Risk.
Investments in securities of an MLP involve risks that differ from investments
in common stock, including risks related to limited control and limited rights
to vote on matters affecting the MLP, risks related to potential conflicts of
interest between the MLP and the MLP’s general partner, cash flow risks,
dilution risks and risks related to the general partner’s right to require
unit-holders to sell their common units at an undesirable time or price. Certain
MLP securities may trade in lower volumes due to their smaller capitalizations.
Accordingly, those MLPs may be subject to more abrupt or erratic price movements
and may lack sufficient market liquidity to enable the Fund to effect sales at
an advantageous time or without a substantial drop in price. Investment in those
MLPs may restrict the Fund’s ability to take advantage of other investment
opportunities. MLPs are generally considered interest-rate sensitive
investments. During periods of interest rate volatility, these investments may
not provide attractive returns.
In
addition, the use of capital to seek to increase incentive distribution payments
to the general partner may conflict with the interests of limited partners.
Generally, incentive distribution payments involve the general partner receiving
an increasing progressive share of MLP distributions. Although limited partners
will receive an increased total distribution if the general partner achieves its
incentive benchmarks, the percentage of the increased distribution received by
the limited partners generally decreases at each benchmark level. As a result,
any increased risk associated with the management of the MLP for the purpose of
increasing distributions may not correspond with the incremental benefit
received by the limited partners.
Mid-Capitalization
Stock Risk.
The
securities of mid-capitalization companies may be more vulnerable to adverse
issuer, market, political, public health, cyber, or economic developments than
securities of large-capitalization companies. The securities of
mid-capitalization companies generally trade in lower volumes and are subject to
greater and more unpredictable price changes than large capitalization stocks or
the stock market as a whole. Some medium capitalization companies have limited
product lines, markets, financial resources, and management personnel and tend
to concentrate on fewer geographical markets relative to large-capitalization
companies.
MLP
Tax Risk.
Much of the benefit that the Fund may derive from its investment in equity
securities of MLPs is a result of MLPs generally being treated as partnerships
for U.S. federal income tax purposes. Partnerships do not pay U.S. federal
income tax at the partnership level. Rather, each partner of a partnership, in
computing its U.S. federal income tax liability, must include its allocable
share of the partnership’s income, gains, losses, deductions and tax credits. A
change in current tax law, or a change in the business of a given MLP, could
result in an MLP being treated as a corporation or other form of taxable entity
for U.S. federal income tax purposes, which would result in such MLP being
required to pay U.S. federal income tax, excise tax or other form of tax on its
taxable income (currently at a rate of 21% for federal corporate income tax).
The classification of an MLP as a corporation or other form of taxable entity
for U.S. federal income tax purposes could have the effect of reducing the
amount of cash available for distribution by the MLP. In addition, it could
cause such distributions paid by the MLP to be taxed to the Fund as: dividend
income, to the extent it is from the MLP’s earnings and profits; return of
capital, to the extent the MLP’s distributions are not paid from its earnings
and profits and to the extent of
Investment
Objectives, Strategies, Risks 66
(and
in reduction of) the Fund’s basis in its MLP interest; or gain from the sale of
the Fund’s MLP interest to the extent the distribution exceeds the MLP’s
earnings and profits and the Fund’s basis in its MLP interest. Thus, if any of
the MLPs owned by the Fund were treated as corporations or other form of taxable
entity for U.S. federal income tax purposes, the after-tax return to the Fund
with respect to its investment in such MLPs could be materially reduced, which
could cause a material decrease in the NAV of the Fund’s shares.
To
the extent that the Fund invests in the equity securities of an MLP classified
as a partnership, the Fund will be required to include in its taxable income the
Fund’s allocable share of the income, gains, losses and deductions recognized by
each such MLP and take into account its allocable share of the MLP’s tax
credits, regardless of whether the MLP distributes cash to the Fund. The portion
of an MLP’s distributions to the Fund, which is not derived from the MLP’s
earnings and profits, generally will not be taxable unless the cash amount (or,
in certain cases, the value of marketable securities) distributed exceeds the
Fund’s basis in its interest in the MLP. Distributions received by the Fund from
an MLP will reduce the Fund’s adjusted basis in its interest in the MLP, but not
below zero. A reduced basis generally will result in an increase in the amount
of gain (or decrease in the amount of loss) that will be recognized by the Fund
for tax purposes on the sale of its interest in the MLP. Cash distributions from
an MLP to the Fund (and, in certain cases, the value of marketable securities
distributed by an MLP to the Fund) in excess of the Fund’s basis in the MLP
generally will be taxable to the Fund as capital gain. The Fund will not benefit
from current favorable federal income tax rates on long-term capital gains
because it will be taxed as a corporation for federal income tax
purposes.
Historically,
energy and certain other MLPs have been able to offset a significant portion of
their taxable income with tax deductions. The Fund will incur a current income
tax liability on the portion of its share of the income and gain from each MLP
investment that is not offset by its share of the MLPs’ tax deductions, by its
share of the MLPs’ tax credits or by the Fund’s net operating loss
carryforwards, if any. The percentage of an MLP’s income that is offset by the
MLP’s tax deductions will fluctuate over time. For example, new acquisitions of
depreciable property by MLPs tend to generate accelerated depreciation and other
tax deductions, and therefore a decline in acquisition activity by such MLPs
owned by the Fund could increase the Fund’s current tax liability. If the
percentage of the income allocated to the Fund that is offset by tax deductions
declines, or the Fund’s portfolio turnover increases, the Fund could incur
increased tax liabilities and the portion of the distributions paid by the Fund
that is treated as tax-deferred return of capital would be reduced and the
portion treated as taxable dividend income would be increased. This generally
would result in lower after-tax distributions to shareholders. If the amount of
a Fund distribution to U.S. Shareholders exceeds the Fund’s current and
accumulated earnings and profits, such excess will be treated first as a
tax-free return of capital to the extent of, and in reduction of, U.S.
Shareholder’s tax basis in the shares, and thereafter as capital gain. Any such
capital gain will be long-term capital gain if such U.S. Shareholder has held
the applicable shares for more than one year. The portion of the distribution
received by the U.S. Shareholder from the Fund that constitutes a return of
capital will decrease the U.S. Shareholder’s tax basis in his or her Fund shares
(but not below zero), which will result in an increase in the amount of gain (or
decrease in the amount of loss) that will be recognized by the U.S. Shareholder
for tax purposes on the later sale of such Fund shares.
Depreciation
or other cost recovery deductions passed through to the Fund from investments in
MLPs in a given year generally will reduce the Fund’s taxable income (and
earnings and profits), but those deductions may be recaptured in the Fund’s
taxable income (and earnings and profits) in subsequent years when the MLPs
dispose of their assets or when the Fund disposes of its interests in the MLPs.
When deductions are recaptured, distributions to the Fund’s shareholders may be
taxable, even though the shareholders at the time of the distribution might not
have held shares in the Fund at the time the
Investment
Objectives, Strategies, Risks 67
deductions
were taken by the Fund, and even though the Fund’s shareholders at the time of
the distribution will not have corresponding economic gain on their shares at
the time of the distribution.
The
portion of the distributions received by the Fund each year that is considered a
return of capital from the MLPs will not be known until the Fund receives a
schedule K-1 for that year with respect to each of its MLP investments. The
Fund’s tax liability will not be known until the Fund completes its annual tax
return. The Fund’s tax estimates could vary substantially from the actual
liability and therefore the determination of the Fund’s actual tax liability may
have a material impact on the Fund’s NAV. The payment of corporate income taxes
imposed on the Fund will decrease cash available for distribution to
shareholders.
Mortgage-Related
and Asset-Backed Securities Risk.
Mortgage-related (including mortgage-backed) and asset-backed securities are
securities whose values are based on underlying pools of loans or other assets
that may include interests in pools of lower-rated debt securities, consumer
loans or mortgages, or complex instruments such as collateralized mortgage
obligations and stripped mortgage-backed securities. The value of these
securities may be significantly affected by changes in interest rates, the
market’s perception of the issuers and the creditworthiness of the parties
involved. The Sub-Adviser’s ability to correctly forecast interest rates and
other economic factors will impact the success of investments in
mortgage-related and asset-backed securities. Some securities may have a
structure that makes their reaction to interest rate changes and other factors
difficult to predict, making their value highly volatile. These securities may
also be subject to prepayment risk if interest rates fall, and if the security
has been purchased at a premium the amount of some or all of the premium may be
lost in the event of prepayment. On the other hand, if interest rates rise,
there may be less of the underlying debt prepaid, which would cause the average
bond maturity to rise and increase the potential for the Fund to lose money.
Non-Diversified
Fund Risk.
Funds that are non-diversified (each, a “Non-Diversified Fund,” and together,
the “Non-Diversified Funds”) can invest a greater percentage of their assets in
a single issuer or a group of issuers, and, as a result, may be subject to
greater credit, market, and other risks than a diversified fund. The poor
performance by a single issuer may have a greater impact on the performance of a
non-diversified fund than a diversified fund. A non-diversified fund’s shares
tend to be more volatile than shares of a diversified fund and are more
susceptible to the risks of focusing investments in a small number of issuers or
industries, and the risks of a single economic, political or regulatory
occurrence. Notwithstanding each Non-Diversified Fund’s status as a
“non-diversified” investment company under the 1940 Act, each Non-Diversified
Fund intends to qualify as a regulated investment company accorded special tax
treatment under the Internal Revenue Code, which imposes its own diversification
requirements that are less restrictive than the requirements applicable to
“diversified” investment companies under the 1940 Act. Each Non-Diversified
Fund’s intention to qualify as a regulated investment company may limit its
pursuit of its investment strategy and its investment strategy could limit its
ability to so qualify.
Other
Investment Companies Risk.
The Funds may invest in other investment companies, including open-end funds and
ETFs. See “Exchange-Traded Funds Risk” above.
The
Funds may purchase the securities of another investment company to temporarily
gain exposure to a portion of the market while awaiting purchase of securities
or as an efficient means of gaining exposure to a particular asset class. The
Funds might also purchase shares of another investment company to gain exposure
to the securities in the investment company’s portfolio at times when a Fund may
not be able to
Investment
Objectives, Strategies, Risks 68
buy
those securities directly. Any investment in another investment company would be
consistent with the Funds’ investment objective and investment program.
The
risks of owning another investment company are generally similar to the risks of
investment directly in the securities in which that investment company invests.
However, an investment company may not achieve its investment objective or
execute its investment strategy effectively, which may adversely affect the
Funds’ performance. In addition, because ETFs trade on a secondary market, their
shares may trade at a premium or discount to the actual NAV of their portfolio
securities and their shares may have greater volatility because of the potential
lack of liquidity.
The
Funds will pay a proportional share of the fees and expenses of the underlying
funds in which it invests, which are in addition to the direct expenses of a
Fund’s own operations, and as a result, shareholders will be subject to two
layers of fees with respect to investments in the Funds.
Preferred
Stock Risk.
Preferred
stock represents an equity interest in a company that generally entitles the
holder to receive dividends and a fixed share of the proceeds from the company’s
liquidation. Preferred stock is subject to issuer-specific and market risk
applicable generally to equity securities, and is also subject to many of the
risks associated with debt securities, including interest rate risk. The value
of preferred stock may decline if dividends are not paid. In certain situations
an issuer may call or redeem its preferred stock or convert it to common stock.
The market prices of preferred stocks are generally more sensitive to actual or
perceived changes in the issuer’s financial condition or prospects than are the
prices of debt securities.
Real
Estate Industry Risk.
The stock prices of companies in the real estate industry, including REITs, are
typically sensitive to changes in real estate values, property taxes, interest
rates, cash flow of underlying real estate assets, occupancy rates, government
regulations affecting zoning, land use, and rents, as well as the management
skill and creditworthiness of the issuer. Companies in the real estate industry
may also be subject to liabilities under environmental and hazardous waste laws
that could negatively affect their value. These factors may reduce the value of
the Fund’s investments in REITs and the real estate industry. REITs depend
generally on their ability to generate cash flow to make distributions to
shareholders or unitholders, which may be subject to defaults by borrowers and
self-liquidations, and some REITs may have limited diversification. REITs are
also subject to the risk of failing to qualify for favorable tax treatment under
the Internal Revenue Code.
Recent
Market Events Risk.
U.S. and international markets have experienced volatility in recent months and
years due to a number of economic, political and global macro factors, including
rising inflation, the possibility of a national or global recession, the war
between Russia and Ukraine, and the conflict between Israel and Hamas. Inflation
and rapid fluctuations in inflation rates may have negative effects on the
economies and securities markets of the United States and other countries.
Uncertainties regarding interest rates, political events, rising government debt
in the U.S. and trade tensions have also contributed to market volatility. As a
result of increased volatility, securities markets have experienced
substantially lower valuations, reduced liquidity, price volatility, credit
downgrades, and increased likelihood of default and valuation
difficulties.
In
addition, global economies and financial markets are increasingly
interconnected, which increases the possibility that conditions in one country
or region might adversely impact issuers in a different country or region. In
particular, a rise in protectionist trade policies, slowing global economic
growth, risks associated with epidemic and pandemic diseases, the risk of trade
disputes, and the possibility of changes to some international trade agreements,
could affect the economies of many nations, including the United States, in ways
that cannot necessarily be foreseen at the present time. The ongoing armed
conflict
Investment
Objectives, Strategies, Risks 69
between
Ukraine and Russia in Europe and Israel and Hamas in the Middle East could have
severe adverse effects on the regional or global economies and the markets for
certain securities. Continuing market volatility as a result of recent market
conditions or other events may have adverse effects on your
account.
REIT
Investment Risk.
A Fund’s investments in REITs will, among other things, be subject to many of
the same risks as a direct investment in real estate. The stock prices of
companies in the real estate industry, including REITs, are typically sensitive
to changes in real estate values, property taxes, interest rates, cash flow of
underlying real estate assets, occupancy rates, government regulations affecting
zoning, land use, and rents, as well as the management skill and
creditworthiness of the issuer.
In
general, real estate values are affected by a variety of factors, including
supply and demand for properties, the economic health of the country or of
different regions, and the strength of specific industries that rent properties.
REITs also depend generally on their ability to generate cash flow to make
distributions to shareholders or unitholders and are subject to the risk of
failing to qualify for favorable tax treatment under the Internal Revenue Code
of 1986, as amended (the “Internal Revenue Code”). Qualification as a REIT under
the Internal Revenue Code of 1986, as amended (the “Code”) in any particular
year is a complex analysis that depends on a number of factors. There can be no
assurance that an entity in which a Fund invests with the expectation that it
will be taxed as a REIT will, in fact, qualify as a REIT. An entity that fails
to qualify as a REIT would be taxed as a corporation, and thus, would not be
entitled to a deduction for dividends paid to its shareholders and would not
pass through to its shareholders the character of income earned by the entity.
Dividends paid by REITs may not receive preferential tax treatment afforded
other dividends.
Risk
of Focusing Investment on Region or Country.
Investing a significant portion of assets in one country or region makes the
Fund more dependent upon the political and economic circumstances of that
particular country or region.
Asia/Pacific
Investment Risk. Investments
in countries in the Asian/Pacific region will be impacted by the market
conditions, legislative or regulatory changes, competition, or political,
economic and other developments in Asia or the Pacific. Investments in China,
New Zealand, Australia and Singapore may subject each Fund to certain additional
risks, including exposure to currency fluctuations, less liquidity,
expropriation, confiscatory taxation, nationalization, exchange control
regulations (including currency blockage), trading halts, imposition of tariffs,
limitations on repatriation and differing legal standards. Hong Kong is one of
the most significant global financial centers. Since 1997, when Great Britain
transferred control of Hong Kong to the Chinese mainland government, Hong Kong
has been a special administrative district of China but is governed by a
regulatory scheme called the “Basic Law” designed to preserve autonomy in most
matters (excluding defense and foreign affairs) until 2047. China has
contractually committed that it will not alter Hong Kong’s autonomy before 2047.
Currently, Hong Kong is undergoing a period of political and social unrest
relating to extradition treaties proposed in 2019. If China were to exercise
authority to impose changes in Hong Kong, Hong Kong’s economy and shares of
companies trading on Hong Kong’s securities markets would be adversely affected.
Eurozone
Investment Risk.
The Economic and Monetary Union of the European Union (EMU) is comprised of the
European Union (EU) members that have adopted the euro currency. By adopting the
euro as its currency, a member state relinquishes control of its own monetary
policies and is subject to fiscal and monetary controls. EMU members could
voluntarily abandon or be forced out of the euro. Such events could impact the
market values of Eurozone and various other securities and currencies, cause
redenomination of certain securities into less valuable local
Investment
Objectives, Strategies, Risks 70
currencies
and create more volatile and illiquid markets. As a result, European countries
are significantly affected by fiscal and monetary controls implemented by the
EMU. The euro currency may not fully reflect the strengths and weaknesses of the
various economies that comprise the EMU and Europe generally. Certain countries
and regions in the EU are experiencing significant financial difficulties. Some
of these countries may be dependent on assistance from other European
governments and institutions or agencies. Assistance may be dependent on a
country’s implementation of reforms or reaching a certain level of performance.
Failure to reach those objectives or an insufficient level of assistance could
result in an economic downturn that could significantly affect the value of
investments in those and other European countries. One or more countries could
depart from the EU, which could weaken the EU and, by extension, its remaining
members. For example, the United Kingdom’s departure, described in more detail
below. As a result of continuing political tensions and armed conflicts,
including the war between Ukraine and Russia, the U.S. and the European Union
imposed sanctions on certain Russian individuals and companies, including
certain financial institutions, and have limited certain exports and imports to
and from Russia. The war has contributed to recent market volatility and may
continue to do so.
United
Kingdom Investment Risk.
Commonly known as “Brexit,” the United Kingdom’s exit from the EU may result in
substantial volatility in foreign exchange markets and may lead to a sustained
weakness in the British pound’s exchange rate against the United States dollar,
the euro and other currencies, which may impact fund returns. Brexit may
destabilize some or all of the other EU member countries and/or the Eurozone.
These developments could result in losses to the Fund, as there may be negative
effects on the value of the Fund’s investments and/or on the Fund’s ability to
enter into certain transactions or value certain investments, and these
developments may make it more difficult for the Fund to exit certain investments
at an advantageous time or price. Such events could results from, among other
things, increased uncertainty and volatility in the United Kingdom, the EU and
other financial markets; fluctuations in asset values; fluctuations in exchange
rates; decreased liquidity of investments located, traded or listed within the
United Kingdom, the EU or elsewhere; changes in the willingness or ability of
financial and other counterparties to enter into transactions or the price and
terms on which other counterparties are willing to transact; and/or changes in
legal and regulatory regimes to which fund investments are or become subject.
Sector
Risk.
The Fund’s assets invested in a particular sector may increase from time to time
based on the portfolio managers’ perception of available investment
opportunities. If the Fund invests a significant portion of its assets in a
particular sector, the Fund will be subject to the risk that companies in the
same sector are likely to react similarly to legislative or regulatory changes,
adverse market conditions, increased competition, or other factors affecting
that sector. In such cases, the Fund would be exposed to an increased risk that
the value of its overall portfolio will decrease because of events that
disproportionately and negatively affect that sector. In addition, investments
in a particular sector may be more volatile than the broader market as a whole,
and the Fund’s investments in such a sector may be disproportionately
susceptible to losses.
Short
Selling Risk.
If a security sold short increases in price, the Fund may have to cover its
short position at a higher price than the short sale price, resulting in a loss.
The Fund may have substantial short positions and may borrow those securities to
make delivery to the buyer. The Fund may not be able to borrow a security that
it needs to deliver or it may not be able to close out a short position at an
acceptable price and may have to sell related long positions before it had
intended to do so. Thus, the Fund may not be able to successfully implement its
short sale strategy due to the limited availability of desired securities or for
other reasons. Because losses on short sales arise from increases in the value
of the security sold
Investment
Objectives, Strategies, Risks 71
short,
such losses are theoretically unlimited. By contrast, a loss on a long position
arises from decreases in the value of the security and is limited by the fact
that a security’s value cannot go below zero. The Fund also may be required to
pay a premium and other transaction costs, which would increase the cost of the
security sold short. The amount of any gain will be decreased, and the amount of
any loss increased, by the amount of the premium, dividends, interest or
expenses the Fund may be required to pay in connection with the short sale.
When
borrowing a security for delivery to a buyer, the Fund also may be required to
pay a premium and other transaction costs, which would increase the cost of the
security sold short. The Fund must normally repay to the lender an amount equal
to any dividends or interest that accrues while the loan is outstanding. The
amount of any gain will be decreased, and the amount of any loss increased, by
the amount of the premium, dividends, interest or expenses the Fund may be
required to pay in connection with the short sale. The lender of a security may
terminate the loan at a time when the Fund is unable to borrow the same security
for delivery. In that case, the Fund would need to purchase a replacement
security at the then current market price or “buy in” by paying the lender an
amount equal to the cost of purchasing the security.
By
investing the proceeds received from selling securities short, the Fund is
employing a form of leverage, which creates special risks. The use of leverage
may increase the Fund’s exposure to long equity positions and make any change in
the Fund’s NAV greater than without the use of leverage. This could result in
increased volatility of returns. There is no guarantee that the Fund will
leverage its portfolio, or if it does, that the Fund’s leveraging strategy will
be successful. The Fund cannot guarantee that the use of leverage will produce a
higher return on an investment.
Regulatory
authorities in the U.S. or other countries may prohibit or restrict the ability
of the Fund to fully implement its short-selling strategy, either generally or
with respect to certain industries or countries, which may impact the Fund’s
ability to fully implement its investment strategies.
Small-
and Mid-Capitalization Stock Risk.
The general risks associated with equity securities and liquidity risk are
particularly pronounced for stocks of companies with market capitalizations that
are small compared to other publicly traded companies. These companies may have
limited product lines, markets or financial resources or they may depend on a
few key employees. Stocks of small-capitalization and mid-capitalization
companies may trade less frequently and in lesser volume than more widely held
securities, and their values may fluctuate more sharply than other securities.
They may also trade in the over-the-counter market or on a regional exchange, or
may otherwise have limited liquidity. Generally, the smaller the company, the
greater these risks become.
Sovereign
Debt Obligations Risk. Investments
in countries’ government debt obligations involve special risks. Certain
countries have historically experienced, and may continue to experience, high
rates of inflation, high interest rates, exchange rate fluctuations, large
amounts of external debt, balance of payments and trade difficulties and extreme
poverty and unemployment. The issuer or governmental authority that controls the
repayment of a country’s debt may not be able or willing to repay the principal
and/or interest when due in accordance with the terms of such debt. A debtor’s
willingness or ability to repay principal and interest due in a timely manner
may be affected by, among other factors, its cash flow situation and, in the
case of a government debtor, the extent of its foreign currency reserves or its
inability to sufficiently manage fluctuations in relative currency valuations,
the availability of sufficient foreign exchange on the date a payment is due,
the relative size of the debt service burden to the economy as a whole, the
government debtor’s policy towards principal international lenders such as the
International Monetary Fund and the political and social constraints to which a
government debtor may be subject.
Investment
Objectives, Strategies, Risks 72
Government
debtors may default on their debt and also may be dependent on expected
disbursements from foreign governments, multilateral agencies and others abroad
to reduce principal and interest arrearages on their debt. The commitment on the
part of these governments, agencies and others to make such disbursements may be
conditioned on a debtor’s implementation of economic reforms and/or economic
performance and the timely service of such debtor’s obligations. Failure to
implement such reforms, achieve such levels of economic performance or repay
principal or interest when due may result in the cancellation of such third
parties’ commitments to lend funds to the government debtor, which may further
impair such debtor’s ability or willingness to service its debts on a timely
basis.
As
a result of the foregoing, a government obligor may default on its obligations.
If such an event occurs, a Fund may have limited (or no) legal recourse against
the issuer and/or guarantor. Remedies must, in some cases, be pursued in the
courts of the defaulting party itself, and the ability of the holder of foreign
government debt securities to obtain recourse may be subject to the political
climate in the relevant country. In addition, no assurance can be given that the
holders of more senior fixed income securities, such as commercial bank debt,
will not contest payments to the holders of other foreign government debt
securities in the event of default under their commercial bank loan agreements.
There is no bankruptcy proceeding by which sovereign debt on which governmental
entities have defaulted may be collected in whole or in part. In addition,
foreign governmental entities may enjoy various levels of sovereign immunity,
and it may be difficult or impossible to bring a legal action against a foreign
governmental entity or to enforce a judgment against such an entity.
Government
obligors in emerging market countries are among the world’s largest debtors to
commercial banks, other governments, international financial organizations and
other financial institutions. The issuers of the government debt securities in
which a Fund may invest have in the past experienced substantial difficulties in
servicing their external debt obligations, which led to defaults on certain
obligations and the restructuring of certain indebtedness. Restructuring
arrangements have included, among other things, reducing and rescheduling
interest and principal payments by negotiating new or amended credit agreements,
and obtaining new credit to finance interest payments. Holders of certain
foreign government debt securities may be requested to participate in the
restructuring of such obligations and to extend further loans to their issuers.
There can be no assurance that the foreign government debt securities in which a
Fund may invest will not be subject to similar restructuring arrangements or to
requests for new credit, which may adversely affect the Fund’s holdings.
Furthermore, certain participants in the secondary market for such debt may be
directly involved in negotiating the terms of these arrangements and may
therefore have access to information not available to other market participants.
Sustainable
Considerations Risk.
A Fund follows a sustainable investment approach by investing in companies that
demonstrate a focus on long-term sustainability in its overall strategy and
business practices. In pursuing such a strategy, the Fund may forgo
opportunities to gain exposure to certain companies, industries or sectors, and
may be overweight or underweight in certain industries or sectors relative to
its benchmark index, which may cause the Fund's performance to be more or less
sensitive to developments affecting those sectors. In addition, since
sustainable investing takes into consideration factors beyond traditional
financial analysis, the Fund may have fewer investment opportunities available
to it than it would have if it did not take into account sustainable criteria
for investments. Sustainability-related information provided by issuers and
third parties, upon which the portfolio managers may rely, continues to develop,
and may be incomplete, inaccurate, use different methodologies, or be applied
differently across companies and industries. The applicable Sub-Adviser’s
criteria of sustainable investing will vary from other managers. Further, the
regulatory landscape for sustainable investing in the United States is still
developing and future rules and regulations may require a Fund to adapt its
investment process. There is also a risk that the companies identified through
the investment process may fail to
Investment
Objectives, Strategies, Risks 73
adhere
to sustainable business practices, which may result in the Fund choosing to sell
a security when it might otherwise be disadvantageous to do so. Further,
investors may differ in their views of what constitutes positive or negative ESG
characteristics of a security. As a result, the respective Fund may invest in
securities that do not reflect the beliefs of any particular investor. There is
no guarantee that sustainable investments will outperform the broader market on
either an absolute or relative basis. There is also no guarantee that a
Sub-Adviser will successfully implement strategies or make investments in
companies that result in favorable ESG outcomes while enhancing long-term
shareholder value and achieving financial returns.
Tax
Risk.
The Fund’s investments and investment strategies, including transactions in
options and futures contracts, may be subject to special and complex federal
income tax provisions, the effect of which may be, among other things: (i) to
disallow, suspend, defer or otherwise limit the allowance of certain losses or
deductions; (ii) to accelerate income to the Fund; (iii) to convert long-term
capital gain, which is currently subject to lower tax rates, into short-term
capital gain or ordinary income, which are currently subject to higher tax
rates; (iv) to convert an ordinary loss or a deduction into a capital loss (the
deductibility of which is more limited); (v) to treat dividends that would
otherwise constitute qualified dividend income as nonqualified dividend income;
and (vi) to produce income that will not qualify as good income under the gross
income requirements that must be met for the Fund to qualify as a RIC under
Subchapter M of the Code. Furthermore, to the extent that any futures contract
or option on a futures contract held by the Fund is a “Section 1256 contract”
under Section 1256 of the Code, the contract will be marked to market annually,
and any gain or loss will be treated as 60% long-term and 40% short-term,
regardless of the holding period for such contract. Section 1256 contracts may
include Fund transactions involving call options on a broad-based securities
index, certain futures contracts and other financial contracts.
U.S.
Government Securities Risk.
Certain U.S. government securities are backed by the right of the issuer to
borrow from the U.S. Treasury while others are supported only by the credit of
the issuer or instrumentality. While the U.S. government is able to provide
financial support to U.S. government-sponsored agencies or instrumentalities, no
assurance can be given that it will always do so. Such securities are neither
issued nor guaranteed by the U.S. Treasury.
U.S.
Treasury Obligations Risk.
U.S. Treasury obligations may differ from other securities in their interest
rates, maturities, times of issuance and other characteristics. Similar to other
issuers, changes to the financial condition or credit rating of the U.S.
government may cause the value of the Fund’s U.S. Treasury obligations to
decline. On August 5, 2011, S&P Global Ratings downgraded U.S. Treasury
securities from AAA rating to AA+ rating. A further downgrade of the ratings of
U.S. government debt obligations, which are often used as a benchmark for other
borrowing arrangements, could result in higher interest rates for individual and
corporate borrowers, cause disruptions in the international bond markets and
have a substantial negative effect on the U.S. economy. A downgrade of U.S.
Treasury securities from another ratings agency or a further downgrade below AA+
rating by S&P Global Ratings may cause the value of the Fund’s U.S. Treasury
obligations to decline.
Value
Investing Risk.
A Fund may invest in companies that may not be expected to experience
significant earnings growth in the immediate future, but whose securities the
applicable Sub-Adviser believes are selling at a price lower than their true
value. “Value stocks” may have experienced adverse business developments or may
be subject to special risks that have caused their securities to be out of
favor. The principal risk of investing in value stocks is that they may never
reach what the Funds’ Sub-Advisers believe is their full value or that they may
go down in value. If a Sub-Adviser’s assessment of a company’s prospects is
wrong, or if the market does not recognize the value of the company, the price
of that company’s stocks may decline or may not approach the value that the
Sub-Adviser anticipates.
Investment
Objectives, Strategies, Risks 74
Portfolio
Holdings Information
A
description of the Funds’ policies and procedures with respect to the disclosure
of each Fund’s portfolio holdings is available in the Funds’ SAI and on the
Funds’ website at www.thecromwellfunds.com.
Investment
Objectives, Strategies, Risks 75
The
Adviser
Each
Fund has entered into an Investment Advisory Agreement (the “Advisory
Agreement”) with the Adviser, Cromwell Investment Advisors, LLC, located at
810 Gleneagles Court, Suite 106, Baltimore, Maryland 21286. Cromwell
is an SEC-registered investment adviser recently formed in July 2021 that
is dedicated to managing mutual funds. As
of December 31, 2023, the Adviser had approximately $460 million of
assets under management.
Under
the Advisory Agreements, the Adviser is entitled to receive a monthly management
fee for its investment advisory services as shown in the table below. The fee is
calculated daily and payable monthly as a percentage of each Fund’s average
daily net assets. As further described below, each Fund is subject to an Expense
Cap. For the fiscal year ended December 31, 2023,
the Adviser was effectively paid, net of any waivers or any recoupment the
amounts shown in the table below:
|
|
|
|
|
|
|
| |
Fund |
Management
Fee |
Management
Fee Paid After Fee Waiver or any Recoupments |
CenterSquare
Fund |
0.60% |
0.59% |
Marketfield
Fund |
1.40% |
1.18% |
Tran
Fund |
0.85% |
0.08%* |
Foresight
Fund |
0.85% |
0.49% |
Greenspring
Fund |
0.75% |
0.75% |
*On
November 1, 2023, the Tran Fund changed its fiscal year from April 30
to December 31. Accordingly, the 2023 information above reflects annualized
advisory fees paid for the period May 1, 2023 through December 31,
2023.
The
Adviser is authorized to delegate certain of its duties with respect to the Fund
to one or more sub-advisers. Pursuant to its authority, the Adviser has
delegated day-to-day management of each Fund in accordance with its investment
objective and policies to each Sub-Adviser. The Adviser is also responsible for
determining the portion of each Fund’s assets to be managed by any given
sub-adviser and reallocating those assets as necessary from time to
time.
The
Adviser retains overall responsibility for the management and investment of the
assets of each Fund. In this capacity, the Adviser develops the overall
investment strategy for each Fund and plays an active role in overseeing,
monitoring and reviewing each Sub-Adviser in the performance of its duties. The
Adviser monitors the investment performance of each Sub-Adviser and also
evaluates the portfolio management teams to determine whether its investment
activities remain consistent with each Fund’s investment objectives, strategies
and policies. The Adviser supervises all compliance functions related to the
operation of each Fund and each Sub-Adviser’s management of each Fund’s
portfolio.
The
Adviser also monitors changes that may impact each Sub-Adviser’s overall
business and regularly performs due diligence reviews of each Sub-Adviser. In
addition, the Adviser obtains detailed, comprehensive information concerning
each Sub-Adviser’s performance and each Fund operations and provides regular
reports on these matters to the Board of Trustees (the “Board”).
Discussions
regarding the basis of the Board’s approval of the Investment Advisory and
Sub-Advisory Agreements for the Greenspring Fund are available in the Fund’s
annual report to shareholders for the year ended December 31, 2023; for the
Tran Fund are available in the Fund’s semi-annual report to shareholders for the
period ended October 31, 2023; and for the CenterSquare Fund and
Marketfield Fund
Management
of the Fund 76
are
available in the Funds’ semi-annual report to shareholders for the period ended
June 30, 2023; and for the Foresight Fund will be available in the
semi-annual report to shareholders for the period ended
June 2024.
Manager-of-Managers
Arrangement
The
Funds and the Adviser have obtained an exemptive order from the SEC that permits
the Adviser, subject to Board approval, to select certain sub-advisers and enter
into or amend sub-advisory agreements with them, without obtaining shareholder
approval. The SEC order extends to sub-advisers that are not otherwise
affiliated with the Adviser or the Funds, as well as sub-advisers that are
wholly-owned subsidiaries of the Adviser or its parent company and sub-advisers
that are partially-owned by, or otherwise affiliated with, the Adviser or its
parent company (the “Manager-of-Managers Structure”).
As
such, the Adviser has the ultimate responsibility for overseeing the Funds’
sub-advisers and recommending their hiring, termination and replacement, subject
to oversight by the Board. If a new sub-adviser is hired for the Funds pursuant
to the order or relief, the Funds are required to notify shareholders within 90
days. The Funds are not required to disclose the individual fees that the
Adviser pays to the Sub-Advisers.
The
Sub-Advisers
CenterSquare
Investment Management LLC,
located at 630 West Germantown Pike, Suite 300, Plymouth Meeting,
Pennsylvania 19462, serves as the Sub-Adviser to the CenterSquare Fund and
manages the Fund’s investments. The CenterSquare Sub-Adviser
(and its predecessor) was formed in 1987 and focuses on actively managed real
estate strategies. The majority partners of CSIM Holdings include a private
equity fund sponsored and managed by Lovell Minnick Partners LLC along with a
limited liability company holding the investments of over 30 employees of
CenterSquare.
Marketfield
Asset Management LLC,
located at 369 Lexington Avenue, 3rd Floor, New York, New York 10017,
serves as the Sub-Adviser to the Marketfield Fund and manages the Fund’s
investments. The Marketfield Sub-Adviser, founded in 2007, is an SEC-registered
investment adviser that offers discretionary portfolio management for private
and institutional clients as adviser or sub-adviser to funds and products.
Tran
Capital Management, L.P.,
located at 1000 Fourth Street, Suite 800, San Rafael, California
94901. Tran Capital was founded in 1974 and, in addition to serving as the
sub-adviser to the Fund, provides portfolio management services to individuals,
corporate pension plans, charitable foundations and academic endowments.
Foresight
Group LLP, located
at The Shard, 32 London Bridge Street, London SE1 9SG, United Kingdom.
Foresight was founded in 1984 and is a leading listed infrastructure and private
equity investment manager with a long-established focus on ESG and
sustainability-led strategies. Foresight Group Holdings Ltd listed on the Main
Market of the London Stock Exchange in February 2021 and operates from 13
offices across seven countries in Europe and Australia.
Corbyn
Investment Management, Inc., located
at 2330 West Joppa Road, Suite 108, Lutherville, Maryland 21093, is a
registered investment adviser providing investment management services for
clients since 1973. Corbyn provides investment advice to individuals, corporate
pension and profit-sharing plans, charitable organizations, foundations,
individual retirement plans, trusts, corporations, and investment
companies.
Management
of the Fund 77
Each
Sub-Adviser is responsible for the day-to-day management of its respective Fund
in accordance with the Fund’s investment objective and policies. The management
fee paid to each Sub-Adviser for its services is paid by the Adviser and not the
Funds.
Fund
Expenses
Each
Fund is responsible for its own operating expenses. Pursuant to an operating
expense limitation agreement, the Adviser has agreed to waive its management
fees and/or reimburse Fund expenses to ensure that Total Annual Fund Operating
Expenses (exclusive of contingent deferred sales loads, taxes, leverage,
interest, brokerage commissions, expenses incurred in connection with any merger
or reorganization, dividends
or interest expenses on short positions, acquired fund fees and expenses and
extraordinary expenses) do not exceed the amounts shown in the table below,
through at least April 30, 2025.
However, the current amount reflected in the table below for the Tran Fund
represents what the Expense Cap will be as of August 31, 2024. From now
until August 31, 2024, the Expense Caps for the Tran Fund’s Investor Class
shares and Institutional Class shares will be 1.10% and 0.85%, respectively.
The
operating expense limitation agreement can be terminated only by, or with the
consent of, the Trust’s Board of Trustees (the “Board of Trustees”). The Adviser
may request recoupment of previously waived fees and paid expenses from each
Fund for up to 36 months from the date such fees and expenses were waived or
paid, subject to the operating expense limitation agreement, if such
reimbursement will not cause the Fund’s expense ratio, after recoupment has been
taken into account, to exceed the lesser of: (1) the expense limitation in
place at the time of the waiver and/or expense payment; or (2) the expense
limitation in place at the time of the recoupment. With regard to the
Marketfield Fund, notwithstanding the foregoing, to the extent the Marketfield
Sub-Adviser waived fees or paid expenses for the predecessor Fund, the Board has
determined it appropriate and pursuant to the Agreement and Plan of
Reorganization, the Marketfield Sub-Adviser may recoup any such fees and
expenses for up to 36 months from the date such fees and expenses were
waived or paid on behalf of the predecessor Fund prior to the Reorganization.
The Expense Cap for each class of each Fund is shown
below:
|
|
|
|
|
|
|
| |
Fund |
Investor
Class |
Institutional
Class |
CenterSquare
Fund |
1.12% |
1.02% |
Marketfield
Fund |
1.80% |
1.55% |
Tran
Fund* |
1.35% |
1.10% |
Foresight
Fund |
1.30% |
1.05% |
Greenspring
Fund |
1.46% |
1.21% |
*
The current Expense Caps for the Tran Fund’s Investor Class shares and
Institutional Class shares are 1.10% and 0.85%, respectively, through
August 31, 2024. Effective September 1, 2024, the Expense Caps for the
Fund’s Investor Class shares and Institutional Class shares are 1.35% and 1.10%
through April 30, 2025.
Portfolio
Managers for the CenterSquare Fund
Dean
Frankel, CFA®
has served as co-manager of the Fund and the Predecessor Fund since
March 2004. Mr. Frankel is Managing Director and Head of Real Estate
Securities of CenterSquare. He is responsible for management of the firm’s
proprietary research process. In addition, Mr. Frankel analyzes and
interprets implications of major events and economic trends while managing the
daily operations of the real estate securities portfolios. Prior to joining
CenterSquare in 1997, Mr. Frankel ran a retail distribution business. Mr.
Frankel received a B.S. in Economics from the University of Pennsylvania’s
Wharton School of Business. He is a CFA charterholder and member of the CFA
Institute.
Management
of the Fund 78
Eric
Rothman, CFA®
joined the firm in 2006 and is a Portfolio Manager for CenterSquare’s real
estate securities group. He is responsible for market research, sector
allocations, and financial modeling across the U.S. real estate securities
universe. Mr. Rothman also manages a REIT preferred stock separate account
mandate. He has over twenty years of REIT and real estate investment experience.
Prior to joining CenterSquare, Mr. Rothman spent more than six years as a
sell-side REIT analyst at Wachovia Securities and three years as an analyst at
AEW Capital Management, LP. Mr. Rothman graduated cum laude from Boston
University with a B.A. in Economics, International Relations and French. He is a
CFA charterholder and member of the CFA Institute.
Portfolio
Managers for the Marketfield Fund
Michael
C. Aronstein
is President, Chief Investment Officer and a co-founding partner of the
Marketfield Sub-Adviser (and its predecessor firm, which was created in 2007).
He is also a portfolio manager of the Fund and the Predecessor Fund. Mr.
Aronstein began his investment career in 1979 at Merrill Lynch, eventually
becoming Manager of Global Investment Strategy before departing in 1987 to join
Comstock Partners. Mr. Aronstein was the President of Comstock Partners for six
years. In 1993, Mr. Aronstein founded West Course Capital, a discretionary
commodity management firm. From 2001 to 2004, Mr. Aronstein was Chief
Investment Strategist for Preservation Group, a provider of independent
macroeconomic and strategic research to professional investors. In 2004, he
joined Oscar Gruss & Son Incorporated and served as Chief Investment
Strategist until 2012. Mr. Aronstein graduated from Yale College with a Bachelor
of Arts in 1974.
Portfolio
Managers for the Tran Fund
Quoc
Tran,
Chief
Investment Officer, Portfolio Manager and Managing Partner, joined Tran Capital
in 2005 and led a management buyout of the firm in 2017. Mr. Tran has over 20
years of investment management experience. Prior to Tran Capital, Mr. Tran
worked at Wallace R. Weitz & Co. and held various positions in portfolio
management and research. Prior to that, he spent five years at Goldman Sachs and
Co. and left the company as Vice President and Director in the Equities
Division. Mr. Tran is a member of the Board of Trustees of Bates College and
serves on various committees, including the Bates College Investment Committee.
Mr. Tran also serves on the Investment Committee Board of the Marin Community
Foundation. Mr. Tran received a B.A. degree with high honors in Rhetoric from
Bates College and his MBA in Finance and Competitive Strategy at the University
of Chicago where he was also a Business Fellow.
Michael
Im, CFA®,
Director
of Research and Co-Portfolio Manager, joined Tran Capital in 2013. Prior to Tran
Capital, Mr. Im was an Analyst at Kiitos Capital Management and was an Equity
Research Associate at Dodge & Cox. Mr. Im received a B.S. degree, with high
honors, in Business Administration from the University of California, Berkeley
(Phi Beta Kappa) and an MBA, with honors, from the University of Chicago, Booth
School of Business. Mr. Im is a CFA Charterholder and a member of the CFA
Society of San Francisco.
Portfolio
Managers for the Foresight Fund
Nick
Scullion is
the lead manager of the Foresight Fund. Mr. Scullion is a partner of the
Sub-Adviser, having joined in 2017, and has acted as a manager of the strategy
since inception in 2019. Mr. Scullion joined Foresight Group to launch its
public equities capability, and has served as a portfolio manager on a UK fund
since its inception in December 2017.
Management
of the Fund 79
Eric
Bright, CFA®
is
co-manager of the Foresight Fund. Mr. Bright is a Senior Investment Manager
who joined the Sub-Adviser in 2019. He has co-managed the strategy since 2021.
Previous to joining Foresight Group, Mr. Bright worked at Reyker Securities
for over five years managing discretionary portfolios and a listed real asset
strategy.
Portfolio
Managers for the Greenspring Fund
Charles
vK. Carlson, CFA,
has been the portfolio manager of the Predecessor Fund since January 1987. He is
also President and a Director of Corbyn. Mr. Carlson graduated from The Johns
Hopkins University with a degree in Political Economy. He has been a CFA
charter-holder since 1986.
Michael
Goodman, CFA,
has been the portfolio manager of the Predecessor Fund since May 2022. He is
also a Senior Investment Analyst for Corbyn. Mr. Goodman graduated from
Carleton College with a B.A. in Psychology. He has been a CFA charter-holder
since 2006.
The
SAI provides additional information about the portfolio managers’ compensation,
other accounts managed and ownership of securities in each Fund.
Choosing
a Share Class
Below
is information about the manner in which each Fund offers shares.
The
Marketfield, CenterSquare, and Tran Funds offer Investor Class shares. The
Marketfield, CenterSquare, Tran, Foresight, and Greenspring Funds also offer
Institutional Class shares. As of April 30, 2024, Investor Class shares of
the Foresight and Greenspring Funds are not yet currently available for
purchase. The different classes represent investments in the same portfolio of
securities, but the classes are subject to different expenses and may have
different share prices as outlined below. Each class of shares has different
distribution arrangements to provide for different investment needs. You should
always discuss the suitability of your investment with your broker-dealer or
financial professional.
|
|
|
|
|
|
|
| |
| Investor
Class |
Institutional
Class |
CenterSquare
Fund only
Shareholder
Service fee |
0.25% |
0.15% |
All
Other Funds(1)
Ongoing
distribution and/or shareholder service (Rule 12b-1)
fees |
0.25%
|
None |
Conversion
feature(2) |
Yes |
Yes |
Purchase
maximum |
None |
None |
(1)As
of April 30, 2024, Investor Class shares of the Foresight and Greenspring
Funds are not yet currently available for purchase.
(2)See
the section titled “Shareholder Information - Converting Shares” for more
information on the voluntary and/or automatic conversions that apply to each
share class and the impact such conversion may have on the fees and expenses of
your shares.
Investor
Class.
Investor Class shares for the Marketfield, Tran, Foresight, and Greenspring
Funds are retail shares that are subject to a Rule 12b‑1 distribution fee
of 0.25% on an annual basis. Investor Class shares for the CenterSquare Fund are
retail shares that
are subject to shareholder servicing fees of up to
Management
of the Fund 80
0.25%
for shareholder servicing provided by financial intermediaries, such as
broker-dealers (including fund supermarket platforms), banks, and trust
companies.
Institutional
Class.
Institutional Class shares of the Funds are offered for sale at NAV, without the
imposition of a sales charge. Institutional Class shares also pay lower annual
expenses than Investor Class shares. Investment minimums may be waived for wrap
fee programs. Institutional Class shares are available to the following:
•certain
IRAs if the amounts invested represent rollover distributions from investments
by any of the retirement plans invested in the Fund;
•certain
financial institutions, endowments, foundations, government entities or
corporations investing on their own behalf;
•existing
Institutional Class shareholders;
•Trustees
of the Trust, former Fund trustees, employees of affiliates of the Fund and the
Adviser and other individuals who are affiliated with the Fund (this also
applies to any spouse, parents, children, siblings, grandparents, grandchildren
and in-laws of those mentioned) and Adviser affiliate employee benefit plans;
and
•wrap
fee programs of certain broker-dealers. Please consult your financial
representative to determine if your wrap fee program is subject to additional or
different conditions or fees.
Institutional
Class shares for the CenterSquare Fund are subject to shareholder servicing fees
of up to 0.15% for shareholder servicing provided by financial intermediaries,
such as broker-dealers (including fund supermarket platforms), banks, and trust
companies. The Institutional Class shares do not pay distribution (12b-1) fees.
Shareholders who transact in Institutional Class shares through a financial
intermediary may be required to pay a commission to the financial intermediary
for effecting such transactions.
Distribution
and Shareholder Service (Rule 12b-1) Plan (Marketfield Fund, Tran Fund,
Foresight Fund, Greenspring Fund)
The
Marketfield, Tran, Foresight, and Greenspring Funds (each, a “12b-1 Fund,” and
collectively, the “12b-1 Funds”) have adopted a Distribution and Shareholder
Service Plan pursuant to Rule 12b-1 (the “Plan”) under the 1940 Act.
Under the Plan, each 12b-1 Fund is authorized to pay the Distributor, or other
such entities as approved by the Board of Trustees, Rule 12b-1 distribution
fees for the sale and distribution of its shares and services provided to
shareholders. The maximum amount of the Rule 12b-1 fee authorized is 0.25%
of each 12b-1 Fund’s average daily net assets attributable to Investors Class
shares, annually. The Distributor may pay any or all amounts received under the
Plan to other persons, including the Adviser, for any distribution or service
activity. Because these fees are paid out of each 12b-1 Fund’s assets
attributable to Investor Class shares on an on-going basis, over time these fees
will increase the cost of your investment in each 12b-1 Fund’s shares and may
cost you more than paying other types of sales charges.
Share
Price
The
price of the Funds’ shares is the Fund’s NAV. A
Fund’s NAV is calculated by dividing the value of the Fund’s total assets, less
its liabilities, by the number of its shares outstanding. In calculating the
Funds’ NAV, portfolio securities are valued using current market values or
official closing prices, if available. The Funds’ NAV is calculated at the close
of regular trading on the NYSE which is generally 4:00 p.m., Eastern time.
The NAV will not be calculated on days on which the NYSE is closed for trading.
If the NYSE closes early, the Funds will calculate its NAV as of the close of
trading on the
Shareholder
Information 81
NYSE
on that day. If an emergency exists as permitted by the SEC, the NAV may be
calculated at a different time.
Each
equity security owned by the Funds, including shares of closed-end funds, that
is listed on a national securities exchange, except portfolio securities listed
on the NASDAQ Stock Market LLC (“NASDAQ”), is valued at its last sale price on
that exchange at the close of that exchange on the date as of which assets are
valued. If a security is listed on more than one exchange, the Funds will use
the price on the exchange that the Funds generally considers to be the principal
exchange on which the security is traded. Portfolio securities listed on NASDAQ
will be valued at the NASDAQ Official Closing Price (“NOCP”), which may not
necessarily represent the last sale price. If there has been no sale on such
exchange or on NASDAQ on such day, the security is valued at the mean between
the most recent quoted bid and asked prices at the close of the exchange on such
day the latest sales price on the “composite market” for the day such security
is being valued. The composite market is defined as the consolidation of the
trade information provided by national securities and foreign exchanges and
over-the-counter (“OTC”) markets as published by an approved independent pricing
service (“Pricing Service”).
Exchange
traded options are valued at the composite price, using the National Best Bid
and Offer quotes. If there are no trades for the option on a given business day
composite option pricing calculates the mean of the highest bid price and lowest
ask price across the exchanges where the option is traded. Option contracts on
securities, currencies and other financial instruments traded in the OTC market
with less than 180 days remaining until their expiration are valued at the
evaluated price provided by the broker-dealer with which the option was traded.
Option contracts on securities, currencies and other financial instruments
traded in the OTC market with 180 days or more remaining until their expiration
are valued at the prices provided by a recognized independent
broker-dealer.
Debt
securities, including short-term instruments having a maturity of 60 days or
less, are valued at the mean in accordance with prices supplied by a Pricing
Service. Pricing Services may use various valuation methodologies such as the
mean between the bid and ask prices, matrix pricing method or other analytical
pricing models as well as market transactions and dealer quotations. When the
price of a debt security is not available from a Pricing Service, the most
recent quotation obtained from one or more broker-dealers known to follow the
issue will be obtained. Quotations will be valued at the mean between the bid
and the offer. Fixed income securities purchased on a delayed-delivery basis are
typically marked to market daily until settlement at the forward settlement
date. Any discount or premium is accreted or amortized using the constant yield
method until maturity.
Money
market funds, demand notes and repurchase agreements are valued at cost. If cost
does not represent current market value the securities will be priced at fair
value.
If
market quotations are not readily available, any security or other asset will be
valued at its fair value as determined under fair value pricing procedures
adopted by the Adviser. These fair value pricing procedures will also be used to
price a security when corporate events, events in the securities market or world
events cause the Sub-Advisers
to believe that the security’s last sale price may not reflect its actual market
value. The intended effect of using fair value pricing procedures is to ensure
that Fund shares are accurately priced. The Board has designated the Adviser as
its “valuation designee” under Rule 2a-5 of the 1940 Act, subject to its
oversight.
When
fair value pricing is employed, the prices of securities used by a Fund to
calculate its NAV may differ from quoted or published prices for the same
securities. Due to the subjective and variable nature of fair value pricing, it
is possible that the fair value determined for a particular security may be
materially
Shareholder
Information 82
different
(higher or lower) from the price of the security quoted or published by others
or the value when trading resumes or is realized upon its sale. Therefore, if a
shareholder purchases or redeems Fund shares when it holds securities priced at
a fair value, the number of shares purchased or redeemed may be higher or lower
than it would be if the Fund were using market value pricing. Each Sub-Adviser
anticipates that a Funds’ portfolio holdings will be fair valued only if market
quotations for those holdings are unavailable or considered
unreliable.
In
the case of foreign securities, the occurrence of certain events after the close
of foreign markets, but prior to the time the Fund’s NAV is calculated (such as
a significant surge or decline in the U.S. or other markets) often will result
in an adjustment to the trading prices of foreign securities when foreign
markets open on the following business day. If such events occur, the Funds will
value foreign securities at fair value, taking into account such events, in
calculating the NAV. In such cases, use of fair valuation can reduce an
investor’s ability to seek to profit by estimating the Fund’s NAV in advance of
the time the NAV is calculated. In the event the Funds hold portfolio securities
that trade in foreign markets or that are primarily listed on foreign exchanges
that trade on weekends or other days when the Funds do not price its shares, the
Fund’s NAV may change on days when shareholders will not be able to purchase or
redeem the Fund’s shares.
How
to Purchase Shares
All
purchase requests received in good order by the Transfer Agent, or by an
Authorized Intermediary before the close of the NYSE (generally 4:00 p.m.,
Eastern time) will be processed at that day’s NAV per share, plus any applicable
sales charges. Purchase requests received by the Transfer Agent or an Authorized
Intermediary after the close of the NYSE (generally 4:00 p.m., Eastern
time) will receive the next business day’s NAV per share, plus any applicable
sales charges. An “Authorized Intermediary” is a financial intermediary that has
made arrangements with the Funds to receive purchase and redemption orders on
its behalf. For additional information about purchasing shares through financial
intermediaries, see “Purchasing Shares Through a Financial Intermediary”
below.
Each
account application (an “Account Application”) to purchase Fund shares is
subject to acceptance by the Funds and is not binding until so accepted. The
Funds reserve the right to reject any purchase order if, in its discretion, it
is in the Fund’s best interest to do so. For example, a purchase order may be
refused if it appears to be so large that it would disrupt the management of the
Funds. Purchases may also be rejected from persons believed to be “market
timers.” See “Tools to Combat Frequent Transactions” below. A service fee,
currently $25, as well as any loss sustained by the Fund, will be deducted from
a shareholder’s account for any payment that is returned to the Transfer Agent
unpaid. Written notice of a rejected purchase order will be provided to the
investor within one or two business days under normal circumstances. The Funds
and the Transfer Agent are not responsible for any losses, liability, cost or
expense resulting from rejecting any purchase order. Your order will not be
accepted until a completed Account Application is received by the Fund or the
Transfer Agent.
Minimum
Investment Amounts
|
|
|
|
|
|
|
|
|
|
| |
| Account
Type |
Initial Investment |
Subsequent Investments |
Investor
Class |
Regular
Accounts |
$2,000 |
| $100 |
|
| Individual
Retirement Accounts |
$1,000 |
| $100 |
|
Institutional
Class
|
Regular
Accounts |
$100,000 |
| $100 |
|
| Individual
Retirement Accounts |
$25,000 |
| $100 |
|
Shareholder
Information 83
The
Funds reserve the right to waive the minimum initial investment or minimum
subsequent investment amounts in its sole discretion. Shareholders will be given
at least 30 days’ written notice of any increase in the minimum dollar amount of
initial or subsequent investments. The minimum investment may be modified for
certain financial intermediaries that submit trades on behalf of underlying
investors. Certain intermediaries also may have investment minimums which may
differ from the Funds’ minimums, and may be waived at the intermediaries’
discretion. Investment minimums may be waived for wrap fee programs. For
accounts sold through financial intermediaries, it is the primary responsibility
of the financial intermediary to ensure compliance with investment
minimums.
Purchase
Requests Must Be Received in Good Order.
Your share price will be the next calculated NAV per share, after the Transfer
Agent or your Authorized Intermediary receives your purchase request in good
order. “Good order” means that your purchase request includes:
•the
name of the Fund and share class;
•the
dollar amount of shares to be purchased;
•your
account application or, for subsequent investments, an investment stub;
and
•a
check payable to the applicable Fund.
The
Funds reserve the right to change the requirements of “good order.” Shareholders
will be given advance notice if the requirements of “good order”
change.
The
offering and sale of shares of the Funds have not been registered outside of the
United States. The Funds generally do not sell shares to investors residing
outside the United States, even if they are United States citizens or lawful
permanent residents, except to investors with United States military APO or FPO
addresses.
Investing
by Telephone. If
you did not decline this option on your account application, and your account
has been open for at least 7 business days, you may purchase additional shares
by telephoning the Fund at 1-855-625-7333 (toll free). You must also have
submitted a voided check or a savings deposit slip to have banking information
established on your account. This option allows shareholders to move money from
their bank accounts to their Fund accounts upon request. Only bank accounts held
at U.S. financial institutions that are Automated Clearing House (“ACH”) members
may be used for telephone transactions. The minimum telephone purchase amount is
$100 once an initial investment has been made. If your order is received prior
to the close of regular trading on the NYSE (generally 4:00 p.m., Eastern time),
shares will be purchased in your account at the NAV, determined on the day that
your order is placed. During periods of high market activity, shareholders may
encounter higher than usual call waiting times. Please allow sufficient time to
place your telephone transaction.
Purchase
by Mail.
To purchase Fund shares by mail, complete and sign the Account Application and
mail it, together with your check made payable to the applicable Fund, to one of
the addresses below. To make additional investments once you have opened your
account, write your account number on the check and send it together with the
Invest by Mail form from your most recent confirmation statement received from
the Transfer Agent. If you do not have the Invest by Mail form, include the Fund
name and your name, address, and account number on a separate piece of paper and
mail it with your check made payable to the Fund to:
Shareholder
Information 84
|
|
|
|
| |
Regular
Mail |
Overnight
or Express Mail |
Cromwell
Funds [Name of Fund] |
Cromwell
Funds [Name of Fund] |
c/o
U.S. Bank Global Fund Services |
c/o
U.S. Bank Global Fund Services |
P.O.
Box 701 |
615
East Michigan Street, 3rd Floor |
Milwaukee,
WI 53201-0701 |
Milwaukee,
WI 53202 |
The
Funds do not consider the U.S. Postal Service or other independent delivery
services to be their agents. Therefore, deposit in the mail or with such
services, of purchase orders or redemption requests does not constitute receipt
by the Transfer Agent. Receipt of purchase orders or redemption requests is
based on when the order is received at the Transfer Agent’s offices. All
purchases by check must be in U.S. dollars drawn on a U.S. financial
institution. The Funds will not accept payment in cash or money orders. To
prevent check fraud, the Funds will not accept third-party checks, Treasury
checks, credit-card checks, traveler’s checks or starter checks for the purchase
of shares. The Funds are unable to accept post-dated checks or any conditional
order or payment.
The
Transfer Agent will charge a $25 fee against a shareholder’s account, in
addition to any loss sustained by the Funds, for any payment that is returned.
It is the policy of the Funds not to accept applications under certain
circumstances or in amounts considered disadvantageous to other shareholders.
The Funds reserve the right to reject any application.
Purchase
by Wire Transfer.
If you are making your first investment in the Funds through a wire purchase,
the Transfer Agent must have received a completed Account Application before you
wire funds. You may mail or use an overnight service to deliver your Account
Application to the Transfer Agent at one of the above addresses. Upon receipt of
your completed Account Application, the Transfer Agent will establish an account
for you. Once your account has been established, you may instruct your financial
institution to send the wire transfer. Prior to sending the wire transfer,
please call the Transfer Agent at 1-855-625-7333 (toll-free) to advise it of the
wire transfer and to ensure proper credit upon receipt. Your financial
institution must include the name of the Fund, your name and your account number
so that monies may be correctly applied. Your financial institution should
transmit immediately available funds by wire to:
|
|
|
|
|
|
|
| |
Wire
to: |
U.S.
Bank National Association |
| 777
East Wisconsin Avenue |
| Milwaukee,
Wisconsin 53202 |
ABA
Number: |
075000022 |
Credit: |
U.S.
Bancorp Fund Services, LLC |
Account: |
112-952-137 |
Further
Credit: |
Cromwell
Funds [Name of Fund] |
| (Shareholder
Name/Account Registration) |
| (Shareholder
Account Number) |
Wired
funds must be received prior to the close of regular trading on the NYSE
(generally 4:00 p.m., Eastern time) to be eligible for same day pricing. The
Funds and U.S. Bank National Association are not responsible for the
consequences of delays from the banking or Federal Reserve wire systems or from
incomplete wiring instructions.
Subsequent
Investments.
The minimum subsequent investment for
Institutional
Class shares and Investor Class shares is $100. Shareholders will be given at
least 30 days’ notice of any increase in the minimum
Shareholder
Information 85
dollar
amount of subsequent investments. You may add to your account at any time by
purchasing shares by mail, by telephone or by wire transfer. You must call to
notify the Fund at 1-855-625-7333 (toll-free) before wiring. An Invest by Mail
form, which is attached to your confirmation statement, should accompany any
subsequent investments made through the mail. All purchase requests must include
your shareholder account number.
Automatic
Investment Plan.
For your convenience, the Funds offer an Automatic Investment Plan (the “AIP”).
Under the AIP, after your initial investment, you may authorize the Fund to
withdraw automatically from your personal checking or savings account an amount
that you wish to invest, which must be at least $100, on a monthly. quarterly,
semi-annual or annual basis. In order to participate in the AIP, your financial
institution must be a member of the ACH network. If you wish to enroll in the
AIP, complete the appropriate section in the Account Application. The Funds may
terminate or modify this privilege at any time. You may terminate your
participation in the AIP at any time by notifying the Transfer Agent five days
prior to the effective date of the request. A fee (currently $25) will be
charged if your bank does not honor an AIP draft for any reason.
Purchasing
Shares Through a Financial Intermediary.
Investors may be charged a fee if they effect transactions through a financial
intermediary. If your financial intermediary charges a fee to effect these
transactions, such fees are not reflected in the Funds’ fee table or expense
examples. If you are purchasing shares through a financial intermediary, you
must follow the procedures established by your financial intermediary. Your
financial intermediary is responsible for sending your purchase order and wiring
payment to the Transfer Agent. Your financial intermediary holds the shares in
your name and receives all confirmations of purchases and sales. Financial
intermediaries placing orders for themselves or on behalf of their customers
should call the Fund at 1-855-625-7333 (toll-free) or follow the instructions
listed in the sections above entitled “Investing by Telephone,” “Purchase by
Mail” and “Purchase by Wire.”
If
you place an order for shares through a financial intermediary that is not an
Authorized Intermediary in accordance with such financial intermediary’s
procedures, and the financial intermediary then transmits your order to the
Transfer Agent in accordance with the Transfer Agent’s instructions, your
purchase will be processed at the NAV next calculated after the Transfer Agent
receives your order. The financial intermediary must promise to send to the
Transfer Agent immediately available funds in the amount of the purchase price
in accordance with the Transfer Agent’s procedures. If payment is not received
within the time specified, the Transfer Agent may rescind the transaction and
the financial intermediary will be held liable for any resulting fees or losses.
In
the case of Authorized Intermediaries that have made satisfactory payment or
redemption arrangements with a Fund, orders will be processed at the NAV next
calculated after receipt in good order by the Authorized Intermediary,
consistent with applicable laws and regulations. An order is deemed to be
received when a Fund or an Authorized Intermediary accepts the order.
For
more information about your financial intermediary’s rules and procedures,
whether your financial intermediary is an Authorized Intermediary, and whether
your financial intermediary imposes cut-off times for the receipt of orders that
are earlier than the cut-off times established by a Fund, you should contact
your financial intermediary directly.
Brokerage
Platforms.
Institutional Class shares may be available on certain brokerage platforms. An
investor transacting in Institutional Class shares through a broker that is
acting as an agent for the investor
Shareholder
Information 86
may
be required by such broker to pay a separate commission and/or other forms of
compensation to their broker. Such broker commissions are not reflected in the
Funds’ fee table or expense examples.
Anti-Money
Laundering Program.
The Trust has established an Anti-Money Laundering Compliance Program (the “AML
Program”) as required by the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the
“USA PATRIOT Act”) and related anti-money laundering laws and regulations. To
ensure compliance with this law, the Account Application asks for, among other
things, the following information for all “customers” seeking to open an
“account” (as those terms are defined in rules adopted pursuant to the USA
PATRIOT Act):
•full
name;
•date
of birth (individuals only);
•Social
Security or taxpayer identification number; and
•permanent
street address (a post office box number alone is not acceptable).
If
you are opening an account in the name of a legal entity (e.g.,
a partnership, limited liability company, business trust, corporation, etc.),
you must also supply the identity of the beneficial owners of the legal entity.
Accounts opened by entities, such as corporations, limited liability companies,
partnerships or trusts, will require additional documentation.
If
any information listed above is missing, your Account Application will be
returned, and your account will not be opened. In compliance with the USA
PATRIOT Act and other applicable anti-money laundering laws and regulations, the
Transfer Agent will verify the information on your application as part of the
AML Program. The Funds reserve the right to request additional clarifying
information and may close your account if clarifying information is not received
by the Funds within a reasonable time of the request or if the Funds cannot form
a reasonable belief as to the true identity of a customer. In the rare event
that we are unable to verify your identity, the Funds reserve the right to
redeem your account at the current day’s NAV. If you require additional
assistance when completing your application, please contact the Transfer Agent
at 1-855-625-7333 (toll-free).
How
to Redeem Shares
In
general, orders to sell or “redeem” shares may be placed either directly with a
Fund or through an Authorized Intermediary. However, if you originally purchased
your shares through an Authorized Intermediary, your redemption order must be
placed with an Authorized Intermediary. Your Authorized Intermediary is
responsible for sending your order to the Transfer Agent and for crediting your
account with the proceeds. You may redeem all or part of your Fund shares on any
business day that the Fund calculates its NAV. To redeem shares directly through
a Fund, you must contact the Fund either by mail or by telephone to place a
redemption request. Shares of each Fund are redeemed at the next calculated NAV
after the Fund has received your redemption request in good order. Your
redemption request must be received in good order (as discussed under “Payment
of Redemption Proceeds,” below) prior to the close of regular trading on the
NYSE (generally 4:00 p.m., Eastern time) by the Transfer Agent or your
Authorized Intermediary. Redemption requests received by the Transfer Agent or
an Authorized Intermediary after the close of regular trading on the NYSE will
be treated as though received on the next business day.
Shareholders
who hold their shares in an IRA or other tax-advantaged account must indicate on
their written redemption request whether to withhold federal income tax.
Redemption requests failing to indicate an election not to have tax withheld
will generally be subject to 10% withholding. Shares held in
Shareholder
Information 87
IRA
or other retirement plan accounts may be redeemed by telephone at 1-855-625-7333
(toll-free). Investors will be asked whether or not to withhold taxes from any
distribution.
Payment
of Redemption Proceeds.
You may redeem your Fund shares at the NAV per share next determined after the
Transfer Agent or your Authorized Intermediary receives your redemption request
in good order. Your redemption request will not be processed on days on which
the NYSE is closed. All requests received by each Fund in good order before the
close of regular trading on the NYSE (generally 4:00 p.m., Eastern time)
will usually be sent one to three business days following the receipt of your
redemption request.
A
redemption request will be deemed in “good order” if it includes:
•the
shareholder’s name;
•the
name of the Fund and share class you are redeeming from;
•the
account number;
•the
share or dollar amount to be redeemed; and
•the
signatures of all shareholders on the account (for written redemption requests,
with signature(s) guaranteed if applicable).
The
Funds reserve the right to change the requirements of “good order.” Shareholders
will be given advance notice if the requirements of “good order” change. For
more information about your financial intermediary’s requirements for redemption
requests in “good order”, please contact your financial
intermediary.
You
may receive proceeds of your sale by a check sent to the address of record,
electronically via the ACH network using the bank instructions previously
established for your account, or federal wire transfer to your pre-established
bank account. The Funds typically expect that they will take one to three
business days following the receipt of your redemption request to pay out
redemption proceeds, regardless of whether the redemption proceeds are paid by
check, ACH transfer or wire. Please note that wires are subject to a $15 fee.
There is no charge to have proceeds sent via ACH; however, funds are typically
credited to your bank within two to three business days after redemption.
Proceeds will be sent within seven calendar days after the Fund receives your
redemption request, unless the Fund has suspended your right of redemption or
postponed the payment date as permitted under the federal securities
laws.
Each
Fund typically expects it will hold cash or cash equivalents to meet redemption
requests. Each Fund may also use the proceeds from the sale of portfolio
securities to meet redemption requests if consistent with the management of the
Fund. These redemption methods will be used regularly and may also be used in
stressed market conditions.
If
the Transfer Agent has not yet collected payment for recently purchased shares
that you are selling, it may delay sending the proceeds until the payment is
collected, which may take up to 12 calendar days from the purchase date.
Shareholders can avoid this delay by utilizing the wire purchase option.
Furthermore, there are certain times when you may be unable to sell Fund shares
or receive proceeds. Specifically, each Fund may suspend the right to redeem
shares or postpone the date of payment upon redemption for more than seven
calendar days as determined by the SEC: (1) during any period in which the
NYSE is closed (other than customary weekend or holiday closings) or trading on
the NYSE is restricted, (2) during any period in which an emergency exists
as a result of which disposal by the Fund of securities owned by it is not
reasonably practicable or it is not reasonably practicable for the Fund to
fairly determine the value of its net assets or (3) during such other
periods as the SEC prescribes for the
Shareholder
Information 88
protection
of shareholders. Your ability to redeem shares by telephone may be delayed or
restricted after you change your address online or by telephone. You may change
your address at any time by a written request, addressed to the Transfer Agent.
Confirmation of an address change will be sent to both your old and new address.
Redemption proceeds will be sent to the address of record. The Funds are not
responsible for interest lost on redemption amounts due to lost or misdirected
mail.
Each
Fund may delay paying redemption proceeds for up to 7 calendar days after
receiving a request if an earlier payment could adversely affect each
Fund.
Redemption
in-Kind.
Each Fund generally pays redemption proceeds in cash. However, the Trust, on
behalf of the Fund, has filed a notice of election pursuant to Rule 18f-1 under
the 1940 Act, under which the Trust, on behalf of each Fund, has reserved the
right for each Fund to redeem in-kind under certain circumstances, meaning that
redemption proceeds are paid in liquid securities with a market value equal to
the redemption price. If the Funds’ pays your redemption proceeds by a
distribution of securities, you could incur brokerage or other charges when
converting the securities to cash. These securities received in-kind remain
subject to general market risks until sold. For federal income tax purposes,
redemptions in-kind are taxed in the same manner to a redeeming shareholder as
redemptions made in cash. In addition, sales of such in-kind securities may
generate taxable gains.
Redemptions
in-kind are typically used to meet redemption requests that represent a large
percentage of the Fund’s net assets in order to minimize the effect of large
redemptions on the Fund and its remaining shareholders. Redemptions in-kind may
be used in circumstances as described above, and may also be used in stressed
market conditions. Each Fund has in place a line of credit that may be used to
meet redemption requests during stressed market conditions.
Redemption
in-kind proceeds are limited to securities that are traded on a public
securities market or for which quoted bid prices are available. In the unlikely
event that each Fund redeems shares in-kind, the procedures utilized by each
Fund to determine the securities to be distributed to redeeming shareholders
will generally be representative of a shareholder’s interest in each Fund’s
portfolio securities. However, each Fund may also redeem in-kind using
individual securities as circumstances dictate.
Signature
Guarantees.
The Transfer Agent may require a signature guarantee for some redemption
requests. Signature guarantees can be obtained from domestic banks, brokers,
dealers, credit unions, national securities exchanges, registered securities
associations, clearing agencies and savings associations, as well as from
participants in the New York Stock Exchange Medallion Signature Program and the
Securities Transfer Agents Medallion Program (“STAMP”), but not from a notary
public. A signature guarantee, from either a Medallion program member or a
non-Medallion program member, of each owner is required in the following
situations:
•if
ownership is being changed on your account;
•when
redemption proceeds are payable or sent to any person, address or bank account
not on record;
•when
a redemption request is received by the Transfer Agent and the account address
has changed within the last 15 calendar days; or
•for
all redemptions in excess of $100,000 from any shareholder account.
Non-financial
transactions, including establishing or modifying certain services on an
account, may require a signature guarantee, signature verification from a
Signature Validation Program member or other acceptable form of authentication
from a financial intermediary source.
Shareholder
Information 89
In
addition to the situations described above, each Fund and/or the Transfer Agent
reserve the right to require a signature guarantee or other acceptable signature
verification in other instances based on the circumstances relative to the
particular situation.
Redemption
by Mail.
You may execute most redemption requests by furnishing an unconditional written
request to each Fund to redeem your shares at the current NAV per share.
Redemption requests in writing should be sent to the Transfer Agent
at:
|
|
|
|
| |
Regular
Mail |
Overnight
or Express Mail |
Cromwell
Funds [Name of Fund] |
Cromwell
Funds [Name of Fund] |
c/o
U.S. Bank Global Fund Services |
c/o
U.S. Bank Global Fund Services |
P.O.
Box 701 |
615
East Michigan Street, 3rd Floor |
Milwaukee,
WI 53201-0701 |
Milwaukee,
WI 53202 |
The
Funds do not consider the U.S. Postal Service or other independent delivery
services to be their agents. Therefore, deposit in the mail or with such
services, of purchase orders or redemption requests does not constitute receipt
by the Transfer Agent. Receipt of purchase orders or redemption requests is
based on when the order is received at the Transfer Agent’s
offices.
Telephone
Redemption.
If you did not decline this option on your account application, you may redeem
shares in amounts of $100,000 or less by instructing a Fund by telephone at
1-855-625-7333 (toll-free). A signature verification from a Signature Validation
Program member or other acceptable form of authentication from a financial
intermediary source may be required of all shareholders in order to qualify for
or to change telephone redemption privileges on an existing account. Telephone
redemptions cannot be made if you have notified the Transfer Agent of a change
of address within 15 days before the redemption request. Once a telephone
transaction has been placed, it may not be cancelled or modified after the close
of regular trading on the NYSE (generally 4:00 p.m., Eastern time). If an
account has more than one owner or authorized person, the Fund will accept
telephone instructions from any one owner or authorized person.
Wire
Redemption.
Wire transfers may be arranged to redeem shares. The Transfer Agent charges a
fee, currently $15, per wire redemption against your account on dollar-specific
trades and from proceeds on complete redemptions and share-specific trades.
There is no such charge to have proceeds sent via ACH.
Systematic
Withdrawal Plan (“SWP”).
Each Fund offers a SWP through which you or your representatives may request
that a redemption in a specific dollar amount be sent to you each month,
calendar quarter or year. You may choose to have a check sent to the address of
record, or proceeds may be sent to a pre-designated bank account via the ACH
network. To start this program, your account must have a value of at least
$2,000. The minimum amount that may be withdrawn each month, quarter or year is
$100. The SWP may be terminated or modified by a shareholder or the Fund at any
time. You may terminate your participation in the SWP at any time in writing or
by telephoning the Transfer Agent no later than five days before the next
scheduled withdrawal. A withdrawal under the SWP involves a redemption of Fund
shares and may result in a taxable capital gain or loss for federal income tax
purposes. In addition, if the amount withdrawn exceeds the amounts credited to
your account, the account ultimately may be depleted. To establish the SWP,
complete the SWP section of the Account Application. Please call 1-855-625-7333
(toll-free) for additional information regarding the SWP.
Shareholder
Information 90
The
Funds’ Right to Redeem an Account.
Each Fund reserves the right to redeem the shares of any shareholder whose
account balance is less than $1,000, other than as a result of a decline in the
NAV. Each Fund will provide you with written notice at least 30 days prior to
redeeming your account. Redemption of a shareholder’s account by the Fund may
result in a taxable capital gain or loss for federal income tax
purposes.
Converting
Shares
Share
class conversions are based on the relevant NAVs of the applicable share classes
at the time of the conversion and no sales load or other charge is imposed. The
Funds expect all share class conversions to be made on a tax-free basis. The
Funds reserve the right to modify or eliminate the share class conversion
feature. When a conversion occurs, reinvested dividends and capital gains
convert with the shares that are converting.
Investors
who hold Institutional Class shares of a Fund through a fee-based program, but
who subsequently become ineligible to participate in the program or withdraw
from the program, may be subject to conversion of their Institutional Class
shares by their program provider to another class of shares of the Fund having
expenses (including Rule 12b-1 fees) that may be higher than the expenses
of the Institutional Class shares. Investors should contact their program
provider to obtain information about their eligibility for the provider’s
program and the class of shares they would receive upon such a
conversion.
Tools
to Combat Frequent Transactions
The
Funds are intended for long-term investors. Short-term market timers who engage
in frequent purchases and redemptions may disrupt a Funds’ investment program
and create additional transaction costs that are borne by all of the Fund’s
shareholders. The Board of Trustees has adopted policies and procedures that are
designed to discourage excessive short-term trading and other abusive trading
practices that may disrupt portfolio management strategies and harm performance.
Each Fund takes steps to reduce the frequency and effect of these activities in
the Fund. These steps may include, among other things, monitoring trading
activity and using fair value pricing, as determined by the Board of Trustees,
when each Sub-Adviser determines that current market prices are not readily
available. Although these efforts are designed to discourage abusive trading
practices, they cannot eliminate the possibility that such activity will occur.
Each Fund seeks to exercise its judgment in implementing these tools to the best
of its abilities and in a manner that it believes is consistent with shareholder
interests. Except as noted herein, the Fund applies all restrictions uniformly
in all applicable cases.
Monitoring
Trading Practices
Each Fund monitors selected trades in an effort to detect excessive short-term
trading activities If, as a result of this monitoring, a Fund believes that you
have engaged in excessive short-term trading, it may, in its discretion, ask you
to stop such activities or refuse to process purchases in your accounts. In
making such judgments, the Fund seeks to act in a manner that it believes is
consistent with the best interests of its shareholders. Each Fund uses a variety
of techniques to monitor for and detect abusive trading practices. These
techniques may change from time to time as determined by the Fund in its sole
discretion. To minimize harm to a Fund and its shareholders, the Fund reserves
the right to reject any purchase order (but not a redemption request), in whole
or in part, for any reason (including, without limitation, purchases by persons
whose trading activity in Fund shares is believed by the Adviser to be harmful
to the Fund) and without prior notice. A Fund may decide to restrict purchase
and sale activity in its shares based on various factors, including whether
frequent purchase and sale activity will disrupt portfolio management strategies
and adversely affect Fund performance or whether the shareholder has conducted
four round trip transactions within a 12-month period.
Shareholder
Information 91
Due
to the complexity and subjectivity involved in identifying abusive trading
activity and the volume of shareholder transactions that a Fund handles, there
can be no assurance that the Fund’s efforts will identify all trades or trading
practices that may be considered abusive. In particular, since each Fund
receives purchase and sale orders through Authorized Intermediaries that use
non-disclosed or omnibus accounts, the Fund may not always detect frequent
trading. However, each Fund will work with Authorized Intermediaries as
necessary to discourage shareholders from engaging in abusive trading practices
and to impose restrictions on excessive trades. In this regard, each Fund has
entered into information-sharing agreements with its Authorized Intermediaries
pursuant to which the Authorized Intermediaries are required to provide to the
Fund, at the Fund’s request, certain information relating to their customers
investing in the Fund through non-disclosed or omnibus accounts. Each Fund will
use this information to attempt to identify abusive trading practices.
Authorized Intermediaries are contractually required to follow any instructions
from the Funds to restrict or prohibit future purchases from shareholders who
are found to have engaged in abusive trading in violation of the Funds’
policies. However, the Fund cannot guarantee the accuracy of the information
provided to it from Authorized Intermediaries and cannot ensure that it will
always be able to detect abusive trading practices that occur through
non-disclosed and omnibus accounts. As a result, the Funds’ ability to monitor
and discourage abusive trading practices in non-disclosed and omnibus accounts
may be limited.
Other
Fund Policies
Telephone
Transactions.
If you accepted telephone privileges on the Account Application or in a letter
to the Funds, you may be responsible for any fraudulent telephone orders as long
as the Fund has taken reasonable precautions to verify your identity. In
addition, once you place a telephone transaction request, it may not be canceled
or modified after the close of regular trading on the NYSE (generally 4:00 p.m.,
Eastern time).
During
periods of significant economic or market change, telephone transactions may be
difficult to complete. If you are unable to contact the Fund by telephone, you
may also mail your requests to the Fund at one of the addresses previously
listed in “How to Purchase Shares – Purchase by Mail” or “How to Redeem Shares –
Redemption by Mail” above. Neither the Funds nor the Transfer Agent are liable
for any loss incurred due to failure to complete a telephone transaction prior
to the close of the NYSE (generally 4:00 p.m., Eastern time).
Telephone
transactions must be received by or prior to the close of regular trading on the
NYSE (generally 4:00 p.m., Eastern time). During periods of high market
activity, shareholders may encounter higher than usual call-waiting times.
Please allow sufficient time to ensure that you will be able to complete your
telephone transaction prior to the close of regular trading on the NYSE. The
Funds are not responsible for delays due to communications or transmission
outages, subject to applicable law.
Neither
the Funds nor any of their service providers are
liable for any loss or expense in acting upon instructions that are reasonably
believed to be genuine, subject to applicable law. To confirm that all telephone
instructions are genuine, the Fund uses reasonable procedures, such as
requesting:
•that
you correctly state your Fund account number;
•the
name in which your account is registered; or
•the
Social Security or taxpayer identification number under which the account is
registered.
Policies
of Authorized Intermediaries.
An Authorized Intermediary or its designee may establish policies that differ
from those of the Funds. For example, an Authorized Intermediary may charge
transaction fees,
Shareholder
Information 92
set
higher or lower minimum investments or impose certain limitations on buying or
selling shares in addition to those identified in this Prospectus. Please
contact your Authorized Intermediary for details.
Closure
of the Fund.
The Adviser retains the right to close a Fund (or partially close a Fund) to new
purchases if it is determined to be in the best interest of shareholders. Based
on market and Fund conditions, the Adviser may decide to close the Fund to new
investors, all investors or certain classes of investors (such as fund
supermarkets) at any time. If a Fund is closed to new purchases it will continue
to honor redemption requests, unless the right to redeem shares has been
temporarily suspended as permitted by federal law.
Householding.
In an effort to decrease costs, the Funds intend to reduce the number of
duplicate prospectuses, supplements and certain other shareholder documents you
receive by sending only one copy of each to those addresses shared by two or
more accounts and to shareholders the Funds reasonably believes are from the
same family or household. If you would like to discontinue householding for your
accounts, please call toll-free at 1-855-625-7333 (toll-free) to request
individual copies of documents; if your shares are held through a Financial
Intermediary, please contact them directly. Once the Funds receives notice to
stop householding, the Fund will begin sending individual copies within 30 days
after receiving your request. This policy does not apply to account
statements.
Lost
Shareholders, Inactive Accounts and Unclaimed Property.
It is important that the Funds maintain a correct address for each shareholder.
An incorrect address may cause a shareholder’s account statements and other
mailings to be returned to the Funds. Based upon statutory requirements for
returned mail, the Fund will attempt to locate the shareholder or rightful owner
of the account. If a Fund is unable to locate the shareholder, then it will
determine whether the shareholder’s account can legally be considered abandoned.
Your mutual fund account may be transferred to the state government of your
state of residence if no activity occurs within your account during the
“inactivity period” specified in your state’s abandoned property laws. The Funds
are legally obligated to escheat (or transfer) abandoned property to the
appropriate state’s unclaimed property administrator in accordance with
statutory requirements. The shareholder’s last known address of record
determines which state has jurisdiction. Please proactively contact the Transfer
Agent toll-free at 1-855-625-7333 at least annually to ensure your account
remains in active status.
If
you are a resident of the state of Texas, you may designate a representative to
receive notifications that, due to inactivity, your mutual fund account assets
may be delivered to the Texas Comptroller. Please contact the Transfer Agent if
you wish to complete a Texas Designation of Representative form.
IRA
Accounts.
IRA accounts will be charged a $15 annual maintenance fee.
|
| |
Distribution
of Fund Shares |
The
Distributor
The
Trust has entered into a Distribution Agreement (the “Distribution Agreement”)
with Foreside Fund Services, LLC (the “Distributor”), located at Three Canal
Plaza, Suite 100, Portland, Maine 04101, pursuant to which the Distributor acts
as the Funds’ principal underwriter, provides certain administration services
and promotes and arranges for the sale of each Fund’s shares. The offering of
Fund shares is continuous, and the Distributor distributes Fund shares on a best
efforts basis. The Distributor is not
Distribution
of Fund Shares 93
obligated
to sell any certain number of shares of the Funds. The Distributor is a
registered broker-dealer and member of the Financial Industry Regulatory
Authority, Inc.
Distribution
and Shareholder Service (Rule 12b-1) Plan
Each
Fund, except for the CenterSquare Fund, has adopted a Distribution and
Shareholder Service Plan pursuant to Rule 12b-1 (the “Plan”) under the 1940
Act for its Investor Class shares. Under the Plan, each Fund is authorized to
pay the Distributor, or other such entities as approved by the Board of
Trustees, Rule 12b-1 distribution fees for the sale and distribution of its
shares and services provided to shareholders. The maximum amount of the
Rule 12b-1 fee authorized is 0.25% of the Fund’s average daily net assets
attributable to Investor Class shares, annually. The Distributor may pay any or
all amounts received under the Plan to other persons, including the Adviser, for
any distribution or service activity. Because these fees are paid out of the
Fund’s assets attributable to Investor Class shares on an on-going basis, over
time these fees will increase the cost of your investment in Fund shares and may
cost you more than paying other types of sales charges.
Payments
to Financial Intermediaries
Each
Fund may pay fees to intermediaries such as banks, broker-dealers, financial
advisers or other financial institutions, including affiliates of the Adviser,
for recordkeeping, sub-administration, sub-accounting, sub-transfer agency and
other shareholder services (collectively, “sub-TA services”) associated with
shareholders whose shares are held of record in omnibus and networked accounts,
retirement plans, other group accounts or accounts traded through registered
securities clearing agents in lieu of the transfer agent providing such
services.
The
Adviser, out of its own resources and legitimate profits and without additional
cost to the Funds or their shareholders, may provide additional cash payments to
certain intermediaries. These payments, sometimes referred to as revenue
sharing, are in addition to Rule 12b-1 fees and sub-TA fees paid by the Funds,
if any. Revenue sharing payments may be made to intermediaries for sub-TA
services or distribution-related services, such as marketing support; access to
third party platforms; access to sales meetings, sales representatives and
management representatives of the intermediary; inclusion of a Fund on a sales
list, including a preferred or select sales list, and in other sales programs.
The Adviser may also pay cash compensation in the form of finder’s fees that
vary depending on the dollar amount of the shares sold. From time to time, and
in accordance with applicable rules and regulations, the Adviser may also
provide non-cash compensation to representatives of various intermediaries who
sell Fund shares or provide services to Fund shareholders.
Distributions
The
CenterSquare Fund will make distributions of net investment income dividends at
least quarterly, typically during the months of March, June, September and
December. These payments could be treated as returns of capital for
U.S. federal income tax purposes. The CenterSquare Fund normally declares
and pays out net realized capital gain distributions, if any, annually in
December. The CenterSquare Fund may make additional distributions if it deems a
distribution to be desirable at other times during the year. You may also change
your elections any time by giving the CenterSquare Fund written notice at least
10 days before the scheduled payment date.
Distribution
of Fund Shares 94
The
Marketfield, Tran, Foresight, and Greenspring Funds will make distributions of
net investment income and net capital gain, if any, at least annually, typically
during the month of December. The Funds may make additional distributions if it
deems a distribution to be desirable at other times during the
year.
All
distributions will be reinvested in additional Fund shares unless you choose one
of the following options: (1) to receive distributions of net capital gain
in cash, while reinvesting net investment income distributions in additional
Fund shares; (2) to receive all distributions in cash; or (3) to reinvest
net capital gain distributions in additional Fund shares while receiving
distributions of net investment income in cash.
If
you wish to change your distribution option, write to or call the Transfer Agent
or Financial Professional in advance of the payment date of the distribution.
However, any such change will be effective only as to distributions for which
the record date is five or more calendar days after the Transfer Agent receives
the request.
If
you elect to receive distributions in cash and the U.S. Postal Service is unable
to deliver your check, or if the check remains uncashed for six months, each
Fund reserves the right to reinvest the distribution check in your account at
each Fund’s then current NAV per share and to reinvest all subsequent
distributions.
Federal
Income Tax Consequences
Changes
in income tax laws, potentially with retroactive effect, could impact the Funds’
investments or the tax consequences to you of investing in the Funds. Some of
the changes could affect the timing, amount and tax treatment of the Funds’
distributions made to shareholders. Please consult your tax advisor before
investing.
Both
Funds intend to qualify and elect to be treated as a RIC under Subchapter M
of the Code, provided that it complies with all applicable requirements
regarding the source of its income, diversification of its assets and the timing
and amount of its distributions. However, there can be no assurance that the
Funds will satisfy all requirements to be taxed as a RIC.
Distributions
of the Funds’ investment company taxable income (which includes, but is not
limited to, interest, dividends, net short-term capital gain and net gain from
foreign currency transactions), if any, are generally taxable to the Funds’
shareholders as ordinary income. For a non-corporate shareholder, to the extent
that the Funds’ distributions of investment company taxable income are
attributable to and reported as “qualified dividend” income, such income may be
subject to tax at the reduced federal income tax rates applicable to long-term
capital gain, if certain holding period requirements have been satisfied by the
shareholder. For a corporate shareholder, a portion of the Funds’ distributions
of investment company taxable income may qualify for the intercorporate
dividends-received deduction to the extent both Funds receive dividends directly
or indirectly from U.S. corporations, reports the amount distributed as eligible
for the deduction and the corporate shareholder meets certain holding period
requirements with respect to its shares. To the extent that the Funds’
distributions of investment company taxable income are attributable to net
short-term capital gain, such distributions will be treated as ordinary income
and generally cannot be offset by a shareholder’s capital losses from other
investments.
Distributions
of the Funds’ net capital gain (net long-term capital gain less net short-term
capital loss) are generally taxable as long-term capital gain regardless of the
length of time that a shareholder has owned Fund shares. Distributions of net
capital gain are not eligible for qualified dividend income treatment or the
dividends-received deduction referred to in the previous paragraph.
Distribution
and Taxes 95
You
will be taxed in the same manner whether you receive your distributions (of
investment company taxable income or net capital gain) in cash or reinvest them
in additional Fund shares. Distributions are generally taxable when received.
However, distributions declared in October, November or December to shareholders
of record and paid the following January are taxable as if received on December
31.
In
addition to the federal income tax, certain individuals, trusts and estates may
be subject to a net investment income (“NII”) tax of 3.8%. The NII tax is
imposed on the lesser of: (i) a taxpayer’s investment income, net of
deductions properly allocable to such income, or (ii) the amount by which such
taxpayer’s modified adjusted gross income exceeds certain thresholds ($250,000
for married individuals filing jointly, $200,000 for unmarried individuals, and
$125,000 for married individuals filing separately). The Funds’ distributions
are includable in a shareholder’s investment income for purposes of this NII
tax. In addition, any capital gain realized by a shareholder upon a sale or
redemption of both Fund’s shares is includable in such shareholder’s investment
income for purposes of this NII tax.
Shareholders
who sell or redeem shares generally will have a capital gain or loss from the
sale or redemption. The amount of the gain or loss and the applicable rate of
federal income tax will depend generally upon the amount paid for the shares,
the amount received from the sale or redemption (including in-kind redemptions)
and how long the shares were held by a shareholder. Gain or loss realized upon a
sale or redemption of both Fund’s shares will generally be treated as a
long-term capital gain or loss if the shares have been held for more than one
year and, if held for one year or less, as a short-term capital gain or loss.
Any loss arising from the sale or redemption of shares held for six months or
less, however, is treated as a long-term capital loss to the extent of any
distributions of net capital gain received or deemed to be received with respect
to such shares. In determining the holding period of such shares for this
purpose, any period during which your risk of loss is offset by means of
options, short sales or similar transactions is not counted. If you purchase
Fund shares (through reinvestment of distributions or otherwise) within 30 days
before or after selling or redeeming other Fund shares at a loss, all or part of
that loss will not be deductible and will instead increase the basis of the new
shares.
A
Fund may elect to pass through to you your pro rata share of foreign income
taxes paid by the Fund if more than 50% of the value of the Fund’s total assets
at the close of its taxable year consists of foreign stocks and securities. The
Fund will notify you if it is eligible to and makes such an
election.
Each
Fund is required to report to certain shareholders and the IRS the cost basis of
Fund shares acquired on or after January 1, 2012, when those shareholders
subsequently sell or redeem those shares. Each Fund will determine cost basis
using the average cost method unless you elect in writing any alternate
IRS-approved cost basis method. Please see the SAI for more information
regarding cost basis reporting.
The
federal income tax status of all distributions made by each Fund for the
preceding year will be annually reported to shareholders. Distributions made by
each Fund may also be subject to state and local taxes. Additional tax
information may be found in the SAI.
This
section is not intended to be a full discussion of federal income tax laws and
the effect of such laws on you. There may be other federal, state, foreign or
local tax considerations applicable to a particular investor. You are urged to
consult your own tax adviser.
Distribution
and Taxes 96
Pursuant
to the Trust’s Amended and Restated Declaration of Trust (the “Declaration of
Trust”), and subject to the limitations disclosed in the Declaration of Trust, a
Fund shareholder may only bring a derivative action if (i) the complaining
shareholder was a shareholder of the Trust or the affected series or class, as
applicable, at the time of the action; (ii) the shareholder was a shareholder of
the Trust or the affected series or class, as applicable, as of the time of the
demand; and (iii) prior to the commencement of such derivative action, the
complaining shareholders have made a written demand to the Board of Trustees
requesting that they cause the Trust or affected series or class, as applicable,
to file the action itself. The Declaration of Trust details information,
certifications, undertakings, and acknowledgments that must be included in the
demand. The Declaration of Trust also requires that, in order to bring a
derivative action, the complaining shareholders must be joined in the action by
shareholders representing no less than a majority of the then outstanding shares
of the affected series or class to which such action relates if it does not
relate to all series and classes. The Trustees shall be entitled to retain
counsel or other advisors in considering the merits of the request and may
require an undertaking by the shareholders making such request to reimburse the
Trust for the expense of any such advisors in the event that the Trustees
determine not to bring such action. The provision requiring at least a majority
of the outstanding voting securities of the Trust, applicable series or class to
join in the request to bring the derivative action and the provision requiring
an undertaking by the requesting shareholders to reimburse the Trust for the
expense of any advisors retained by the Board in the event that the Trustees
determine not to bring such action, do not apply to claims brought under federal
securities laws.
If
the demand for derivative action has been considered by the Trustees, and after
considering the merits of the claim, the Trustees have determined that
maintaining a suit would not be in the best interests of the Trust or the
affected series or class, as applicable, the complaining shareholders will be
barred from commencing the derivative action (this provision does not apply to
claims arising under the federal securities laws). The Trust will inform the
complaining shareholders of any decision reached within five business days of
reaching its decision.
Investors
cannot invest directly in an index, although they may invest in the underlying
securities.
The
FTSE Nareit All Equity REITs Index is a free-float adjusted, market
capitalization-weighted index of U.S. equity REITs. Constituents of the index
include all tax-qualified REITs with more than 50 percent of total assets in
qualifying real estate assets other than mortgages secured by real
property.
The
S&P 500® Index is an unmanaged, capitalization-weighted index of 500 stocks
designed to represent the broad domestic economy. The performance figures
reflect all dividends reinvested.
The
Russell Midcap®
Index measures the performance of the mid-cap segment of the US equity universe.
The Russell Midcap Index is a subset of the Russell 1000®
Index and includes approximately 800 of the smallest securities based on a
combination of their market cap and current index membership. The Russell Midcap
Index is constructed to provide a comprehensive and unbiased barometer for the
mid-cap segment.
The
Russell 3000®
Value Index is a capitalization-weighted equity index composed of those
companies that are among the 3,000 largest U.S. companies based on total market
capitalization that exhibit value characteristics such as lower price-to book
ratios and lower expected growth rates. It is a subset of the
Distribution
and Taxes 97
Russell
3000®
Index. This index is a total return market index, which assumes that all cash
distributions are reinvested.
Derivative
Actions and Index
Descriptions 98
The
following tables illustrate the financial performance for the Funds for the
fiscal periods shown. Certain information reflects financial results for a
single Fund share. The total returns in the tables represent the rate that an
investor would have earned or lost on an investment in the Fund assuming
reinvestment of all dividends and distributions.
The
information for the predecessor CenterSquare, Marketfield, Tran and Greenspring
Funds have been audited by different independent registered public accounting
firms prior to their respective reorganizations into the Trust. The information
for the fiscal year ended December 31, 2022, for the CenterSquare Fund and
Marketfield Fund have been audited by Funds’ prior independent registered public
accounting firm. The information for the fiscal year ended December 31,
2023, has been audited by Cohen & Company, Ltd., the Funds’ independent
registered public accounting firm, whose report, along with the Funds’ financial
statements, are included in the annual
report,
which is available upon request.
CROMWELL
CENTERSQUARE REAL ESTATE FUND — INVESTOR CLASS(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
For
a Fund share outstanding throughout the periods |
Year
Ended December 31, |
| |
PER
SHARE DATA: |
2023 |
| 2022 |
| 2021 |
| 2020 |
| 2019 |
|
|
| |
Net
asset value, beginning of period |
$9.97 |
|
| $14.06 |
|
| $10.51 |
|
| $11.04 |
|
| $9.56 |
|
|
|
|
|
| |
Investment
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net
investment income (loss)(2)(3) |
0.22 |
|
| 0.17 |
|
| 0.10 |
|
| 0.11 |
|
| 0.18 |
|
|
|
|
|
| |
Net
realized and unrealized gain (loss) on investments |
0.91 |
|
| (3.63) |
|
| 4.00 |
|
| (0.42) |
|
| 1.99 |
|
|
|
|
|
| |
Total
from investment operations |
1.13 |
|
| (3.46) |
|
| 4.10 |
|
| (0.31) |
|
| 2.17 |
|
|
|
|
|
| |
Less
distributions from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net
investment income |
(0.21) |
|
| (0.17) |
|
| (0.21) |
|
| (0.13) |
|
| (0.21) |
|
|
|
|
|
| |
Net
realized gains |
— |
|
| (0.46) |
|
| (0.34) |
|
| — |
|
| (0.48) |
|
|
|
|
|
| |
Paid
in capital |
— |
|
| — |
|
| — |
|
| (0.09) |
|
| — |
|
|
|
|
|
| |
Total
distributions |
(0.21) |
|
| (0.63) |
|
| (0.55) |
|
| (0.22) |
|
| (0.69) |
|
|
|
|
|
| |
NET
ASSET VALUE, END OF PERIOD |
$10.89 |
|
| $9.97 |
|
| $14.06 |
|
| $10.51 |
|
| $11.04 |
|
|
|
|
|
| |
TOTAL
RETURN(3) |
11.70 |
% |
| (24.72) |
% |
| 39.45 |
% |
| (2.61) |
% |
| 22.90 |
% |
|
|
|
|
| |
SUPPLEMENTAL
DATA AND RATIOS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net
assets, end of period (in 000’s) |
$ |
59,869 |
|
| $69,987 |
|
| $ |
104,438 |
|
| $ |
90,167 |
|
| $ |
166,047 |
|
|
|
|
|
| |
Ratio
of expenses to average net assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Before
expense reimbursement/recoupment(4) |
1.12 |
% |
(5) |
1.11 |
% |
(5) |
1.12 |
% |
(6) |
1.15 |
% |
| 1.10 |
% |
|
|
|
|
| |
After
expense reimbursement/recoupment(7) |
1.12 |
% |
(5) |
1.12 |
% |
(5) |
1.12 |
% |
(6) |
1.11 |
% |
| 1.10 |
% |
|
|
|
|
| |
Ratio
of net investment income (loss) to average net assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
After
expense reimbursement/recoupment |
2.15 |
% |
| 1.46 |
% |
| 0.84 |
% |
| 1.07 |
% |
| 1.62 |
% |
|
|
|
|
| |
Portfolio
turnover rate |
47 |
% |
| 57 |
% |
| 68 |
% |
| 131 |
% |
| 76 |
% |
|
|
|
|
| |
(1)Prior
to March 7, 2022, the Investor Class was known as Class N. Prior to
February 27, 2017, Class N was known as Class S.
(2)Calculated
using the average shares outstanding method.
(3)Total
returns and net investment income would have differed had certain expenses not
been offset.
(4)Includes
reduction from broker recapture amounting to less than 0.01% for the fiscal year
ended December 31, 2021, 0.01% for the fiscal year ended December 31,
2020 and less than 0.01% for the fiscal year ended December 31,
2019.
(5)Ratio
excludes any expenses not included under the expense cap of the Fund including
interest expense which amounts to less than 0.005%.
(6)Such
ratio includes recapture of waived/reimbursed fees from prior periods amounting
to less than 0.01%.
(7)Excludes
the impact of expense reimbursement or fee waivers and expense reductions such
as brokerage credits, but includes expense repayments and non-reimbursable
expenses, if any, such as interest, taxes, and extraordinary
expenses.
CROMWELL
CENTERSQUARE REAL ESTATE FUND — INSTITUTIONAL CLASS(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
For
a Fund share outstanding throughout the periods |
Year
Ended December 31, |
|
| |
PER
SHARE DATA: |
2023 |
| 2022 |
| 2021 |
| 2020 |
| 2019 |
|
|
|
| |
Net
asset value, beginning of period |
$9.96 |
|
| $14.05 |
|
| $10.51 |
|
| $11.04 |
|
| $9.56 |
|
|
|
|
|
|
| |
Investment
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net
investment income (loss)(2)(3) |
0.24 |
|
| 0.19 |
|
| 0.12 |
|
| 0.12 |
|
| 0.19 |
|
|
|
|
|
|
| |
Net
realized and unrealized gain (loss) on investments |
0.91 |
|
| (3.63) |
|
| 3.98 |
|
| (0.42) |
|
| 1.99 |
|
|
|
|
|
|
| |
Total
from investment operations |
1.15 |
|
| (3.44) |
|
| 4.10 |
|
| (0.30) |
|
| 2.18 |
|
|
|
|
|
|
| |
Less
distributions from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net
investment income |
(0.22) |
|
| (0.19) |
|
| (0.22) |
|
| (0.13) |
|
| (0.22) |
|
|
|
|
|
|
| |
Net
realized gains |
— |
|
| (0.46) |
|
| (0.34) |
|
| — |
|
| (0.48) |
|
|
|
|
|
|
| |
Paid
in capital |
— |
|
| — |
|
| — |
|
| (0.10) |
|
| — |
|
|
|
|
|
|
| |
Total
distributions |
(0.22) |
|
| (0.65) |
|
| (0.56) |
|
| (0.23) |
|
| (0.70) |
|
|
|
|
|
|
| |
NET
ASSET VALUE, END OF PERIOD |
$10.89 |
|
| $9.96 |
|
| $14.05 |
|
| $10.51 |
|
| $11.04 |
|
|
|
|
|
|
| |
TOTAL
RETURN(3) |
11.71 |
% |
| (24.65) |
% |
(4) |
39.53 |
% |
| (2.47) |
% |
| 23.06 |
% |
|
|
|
|
|
| |
SUPPLEMENTAL
DATA AND RATIOS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net
assets, end of period (in 000’s) |
$ |
66,391 |
|
| $ |
63,915 |
|
| $ |
102,347 |
|
| $ |
50,587 |
|
| $ |
56,324 |
|
|
|
|
|
|
| |
Ratio
of expenses to average net assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Before
expense reimbursement/recoupment(5) |
1.03 |
% |
(6) |
0.99 |
% |
(6) |
1.00 |
% |
(7) |
1.02 |
% |
| 0.97 |
% |
|
|
|
|
|
| |
After
expense reimbursement/recoupment(8) |
1.02 |
% |
(6) |
1.00 |
% |
(6) |
1.00 |
% |
(7) |
0.98 |
% |
| 0.97 |
% |
|
|
|
|
|
| |
Ratio
of net investment income (loss) to average net assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
After
expense reimbursement/recoupment |
2.36 |
% |
| 1.56 |
% |
| 0.96 |
% |
| 1.19 |
% |
| 1.75 |
% |
|
|
|
|
|
| |
Portfolio
turnover rate |
47 |
% |
| 57 |
% |
| 68 |
% |
| 131 |
% |
| 76 |
% |
|
|
|
|
|
| |
(1)Prior
to March 7, 2022, the Institutional Class was known as
Class I.
(2)Calculated
using the average shares outstanding method.
(3)Total
returns and net investment income would have differed had certain expenses not
been offset.
(4)Includes
adjustments in accordance with accounting principles generally accepted in the
United States and, consequently, the net asset values for financial reporting
purposes and the returns based upon those net asset values may differ from the
net asset values and returns for shareholder transactions.
(5)Includes
reduction from broker recapture amounting to less than 0.01% for the fiscal year
ended December 31, 2021, 0.01% for the fiscal year ended December 31,
2020 and less than 0.01% for the fiscal year ended December 31,
2019.
(6)Ratio
excludes any expenses not included under the expense cap of the Fund including
interest expense which amounts to less than 0.005%.
(7)Such
ratio includes recapture of waived/reimbursed fees from prior periods amounting
to less than 0.01%.
(8)Excludes
the impact of expense reimbursement/recoupment or fee waivers and expense
reductions such as brokerage credits, but includes expense repayments and
non-reimbursable expenses, if any, such as interest, taxes, and extraordinary
expenses.
CROMWELL
MARKETFIELD L/S FUND — INVESTOR CLASS(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
For
a Fund share outstanding throughout the periods |
Year
Ended December 31, |
|
PER
SHARE DATA: |
2023 |
| 2022 |
| 2021 |
| 2020 |
| 2019 |
|
| |
Net
asset value, beginning of period |
$ |
22.13 |
|
| $ |
21.62 |
|
| $ |
19.96 |
|
| $ |
16.65 |
|
| $ |
14.92 |
|
|
| |
Investment
operations: |
|
|
|
|
|
|
|
|
|
|
| |
Net
investment income (loss)(2) |
0.41 |
|
| 0.11 |
|
| (0.02) |
|
| (0.16) |
|
| 0.04 |
|
|
| |
Net
realized and unrealized gain (loss) on investments |
(0.48) |
|
| 0.50 |
|
| 1.68 |
|
| 3.47 |
|
| 1.73 |
|
|
| |
Total
from investment operations |
(0.07) |
|
| 0.61 |
|
| 1.66 |
|
| 3.31 |
|
| 1.77 |
|
|
| |
Less
distributions from: |
|
|
|
|
|
|
|
|
|
|
| |
Net
investment income |
(0.47) |
|
| (0.10) |
|
| — |
|
| — |
|
| (0.04) |
|
|
| |
Total
distributions |
(0.47) |
|
| (0.10) |
|
| — |
|
| — |
|
| (0.04) |
|
|
| |
NET
ASSET VALUE, END OF PERIOD |
$ |
21.59 |
|
| $ |
22.13 |
|
| $ |
21.62 |
|
| $ |
19.96 |
|
| $ |
16.65 |
|
|
| |
TOTAL
RETURN |
(0.34) |
% |
| 2.81 |
% |
| 8.32 |
% |
| 19.88 |
% |
| 11.87 |
% |
|
| |
SUPPLEMENTAL
DATA AND RATIOS: |
|
|
|
|
|
|
|
|
|
|
| |
Net
assets, end of period (000’s) |
$ |
50,106 |
|
| $ |
46,575 |
|
| $ |
47,709 |
|
| $ |
42,483 |
|
| $ |
37,761 |
|
|
| |
Ratio
of expenses to average net assets: |
|
|
|
|
|
|
|
|
|
|
| |
Before
expense reimbursement/recoupment |
2.60 |
% |
| 2.44 |
% |
| 2.58 |
% |
| 2.75 |
% |
| 2.94 |
% |
|
| |
After
expense reimbursement/recoupment |
2.38 |
% |
| 2.25 |
% |
| 2.36 |
% |
| 2.47 |
% |
| 2.70 |
% |
|
| |
Ratio
of expenses excluding dividend and interest expense on short positions to
average net assets: |
|
|
|
|
|
|
|
|
|
|
| |
Before
expense reimbursement/recoupment |
2.02 |
% |
| 1.99 |
% |
| 2.02 |
% |
| 2.08 |
% |
| 2.04 |
% |
|
| |
After
expense reimbursement/recoupment |
1.80 |
% |
| 1.80 |
% |
| 1.80 |
% |
| 1.80 |
% |
| 1.80 |
% |
|
| |
Ratio
of net investment income (loss) to average net assets: |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
After
expense reimbursement/recoupment(3) |
1.89 |
% |
| 0.51 |
% |
| (0.08) |
% |
| (0.95) |
% |
| 0.26 |
% |
|
| |
Portfolio
turnover rate(4) |
30 |
% |
| 40 |
% |
| 26 |
% |
| 12 |
% |
| 17 |
% |
|
| |
(1)Prior
to March 14, 2022, the Investor Class was known as
Class A.
(2)Calculated
using the average shares outstanding method.
(3)The
net investment income (loss) ratios include dividend and interest expense on
short positions.
(4)Consists
of long-term investments only; excludes securities sold short and derivative
instruments.
CROMWELL
MARKETFIELD L/S FUND — INSTITUTIONAL CLASS(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
For
a Fund share outstanding throughout the periods |
Year
Ended December 31, |
|
PER
SHARE DATA: |
2023 |
| 2022 |
| 2021 |
| 2020 |
| 2019 |
|
| |
Net
asset value, beginning of period |
$ |
22.56 |
|
| $ |
22.03 |
|
| $ |
20.29 |
|
| $ |
16.88 |
|
| $ |
15.14 |
|
|
| |
Investment
operations: |
|
|
|
|
|
|
|
|
|
|
| |
Net
investment income (loss)(2) |
0.48 |
|
| 0.18 |
|
| 0.03 |
|
| (0.12) |
|
| 0.08 |
|
|
| |
Net
realized and unrealized gain (loss) on investments |
(0.50) |
|
| 0.50 |
|
| 1.71 |
|
| 3.53 |
|
| 1.75 |
|
|
| |
Total
from investment operations |
(0.02) |
|
| 0.68 |
|
| 1.74 |
|
| 3.41 |
|
| 1.83 |
|
|
| |
Less
distributions from: |
|
|
|
|
|
|
|
|
|
|
| |
Net
investment income |
(0.52) |
|
| (0.15) |
|
| — |
|
| — |
|
| (0.09) |
|
|
| |
Total
distributions |
(0.52) |
|
| (0.15) |
|
| — |
|
| — |
|
| (0.09) |
|
|
| |
NET
ASSET VALUE, END OF PERIOD |
$ |
22.02 |
|
| $ |
22.56 |
|
| $ |
22.03 |
|
| $ |
20.29 |
|
| $ |
16.88 |
|
|
| |
TOTAL
RETURN |
(0.10) |
% |
| 3.10 |
% |
| 8.58 |
% |
| 20.20 |
% |
| 12.13 |
% |
|
| |
SUPPLEMENTAL
DATA AND RATIOS: |
|
|
|
|
|
|
|
|
|
|
| |
Net
assets, end of period (in 000’s) |
$ |
86,686 |
|
| $ |
101,115 |
|
| $ |
90,440 |
|
| $ |
91,645 |
|
| $ |
105,998 |
|
|
| |
Ratio
of expenses to average net assets: |
|
|
|
|
|
|
|
|
|
|
| |
Before
expense reimbursement/recoupment |
2.35 |
% |
| 2.19 |
% |
| 2.33 |
% |
| 2.47 |
% |
| 2.68 |
% |
|
| |
After
expense reimbursement/recoupment |
2.13 |
% |
| 2.00 |
% |
| 2.11 |
% |
| 2.20 |
% |
| 2.44 |
% |
|
| |
Ratio
of expenses excluding dividend and interest expense on short positions to
average net assets: |
|
|
|
|
|
|
|
|
|
|
| |
Before
expense reimbursement/recoupment |
1.77 |
% |
| 1.74 |
% |
| 1.78 |
% |
| 1.83 |
% |
| 1.80 |
% |
|
| |
After
expense reimbursement/recoupment |
1.55 |
% |
| 1.55 |
% |
| 1.56 |
% |
| 1.56 |
% |
| 1.56 |
% |
|
| |
Ratio
of net investment income (loss) to average net assets: |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
After
expense reimbursement/recoupment(3) |
2.14 |
% |
| 0.81 |
% |
| 0.13 |
% |
| (0.71) |
% |
| 0.49 |
% |
|
| |
Portfolio
turnover rate(4) |
30 |
% |
| 40 |
% |
| 26 |
% |
| 12 |
% |
| 17 |
% |
|
| |
(1)Prior
to March 14, 2022, the Institutional Class was known as
Class I.
(2)Calculated
using the average shares outstanding method.
(3)The
net investment income (loss) ratios include dividend and interest expense on
short positions.
(4)Consists
of long-term investments only; excludes securities sold short and derivative
instruments.
CROMWELL
TRAN SUSTAINABLE FOCUS FUND — INVESTOR CLASS(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
For
a Fund share outstanding throughout the periods |
|
| Year
Ended April 30, |
PER
SHARE DATA: |
Period
Ended
December 31, 2023(8) |
| 2023 |
| 2022 |
2021 |
2020 |
2019 |
| |
Net
asset value, beginning of period |
$ |
4.95 |
|
| $ |
6.51 |
|
| $ |
9.39 |
| $ |
6.74 |
| $ |
7.73 |
| $ |
8.60 |
|
| |
Investment
operations: |
|
|
|
|
|
|
|
|
| |
Net
investment income (loss)(2) |
(0.01) |
|
| (0.02) |
|
| (0.07) |
| (0.04) |
| (0.03) |
| (0.02) |
|
| |
Net
realized and unrealized gain (loss) on investments |
1.12 |
|
| (0.94) |
|
| (0.92) |
| 3.85 |
| 0.27 |
| 0.79 |
|
| |
Total
from investment operations |
1.11 |
|
| (0.96) |
|
| (0.99) |
| 3.81 |
| 0.24 |
| 0.77 |
|
| |
Less
distributions from: |
|
|
|
|
|
|
|
|
| |
Net
investment income |
— |
|
| — |
|
| (1.89) |
| (1.16) |
| (1.23) |
| (1.64) |
|
| |
Net
realized gain |
— |
|
| (0.60) |
|
| — |
| — |
| — |
| — |
|
| |
Return
of capital |
— |
|
| — |
|
(7) |
— |
| — |
| — |
| — |
|
| |
Total
distributions |
— |
|
| (0.60) |
|
| (1.89) |
| (1.16) |
| (1.23) |
| (1.64) |
|
| |
NET
ASSET VALUE, END OF PERIOD |
$ |
6.06 |
|
| $ |
4.95 |
|
| $ |
6.51 |
| $ |
9.39 |
| $ |
6.74 |
| $ |
7.73 |
|
| |
TOTAL
RETURN(3)(5) |
22.42 |
% |
| (14.76) |
% |
| (15.09) |
% |
60.14 |
% |
2.11 |
% |
12.62 |
% |
| |
SUPPLEMENTAL
DATA AND RATIOS: |
|
|
|
|
|
|
|
|
| |
Net
assets, end of period (in 000’s) |
$ |
17,028 |
|
| $ |
16,855 |
|
| $ |
21,825 |
| $ |
33,768 |
| $ |
22,395 |
| $ |
17,375 |
|
| |
Ratio
of expenses to average net assets: |
|
|
|
|
|
|
|
|
| |
Before
expense reimbursement/recoupment(4)(6) |
1.87 |
% |
(6) |
1.96 |
% |
(6) |
1.78 |
% |
1.82 |
% |
1.94 |
% |
1.69 |
% |
| |
After
expense reimbursement/recoupment(4)(6) |
1.10 |
% |
(6) |
1.10 |
% |
(6) |
1.10 |
% |
1.10 |
% |
1.10 |
% |
1.10 |
% |
| |
Ratio
of net investment income (loss) to average net assets: |
|
|
|
|
|
|
|
|
| |
After
expense reimbursement/recoupment(4) |
(0.40) |
% |
| (0.45) |
% |
| (0.84) |
% |
(0.56) |
% |
(0.43) |
% |
(0.23) |
% |
| |
Portfolio
turnover rate(3) |
42 |
% |
| 49 |
% |
| 38 |
% |
66 |
% |
58 |
% |
51 |
% |
| |
(1)Prior
to August 8, 2022, the Investor Class was known as
Class A.
(2)Calculated
using the average shares outstanding method.
(3)Not
annualized for periods less than one year.
(4)Annualized
for periods less than one year.
(5)Total
return is calculated assuming a purchase of shares on the first day and a sale
of shares on the last day of each period reported and includes reinvestments of
dividends and distributions, if any. If the Adviser had not waived
fees/reimbursed expenses, the total return would have been lower. Total return
does not reflect the impact of the maximum front-end sales load of 5.00% in
effect prior to August 8, 2022. If reflected, the return would be
lower.
(6)Ratio
excludes any expenses not included under the expense cap of the Fund including
interest expense which amounts to less than 0.005%.
(7)Amount
is less than $0.005 per share.
(8)For
the period May 1, 2023 through December 31, 2023. On November 1, 2023
the Tran Sustainable Focus Fund changed its fiscal year end from April 30
to December 31.
CROMWELL
TRAN SUSTAINABLE FOCUS FUND — INSTITUTIONAL CLASS(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
For
a Fund share outstanding throughout the periods |
|
| Year
Ended April 30, |
PER
SHARE DATA: |
Period
Ended
December 31, 2023(8) |
| 2023 |
| 2022 |
2021 |
2020 |
2019 |
|
| |
Net
asset value, beginning of period |
$ |
5.49 |
|
| $ |
7.13 |
|
| $ |
10.09 |
| $ |
7.16 |
| $ |
8.12 |
| $ |
8.93 |
|
|
| |
Investment
operations: |
|
|
|
|
|
|
|
|
|
| |
Net
investment income (loss)(2) |
(0.01) |
|
| (0.01) |
|
| (0.06) |
| (0.03) |
| (0.01) |
| — |
|
(6) |
| |
Net
realized and unrealized gain (loss) on investments |
1.25 |
|
| (1.03) |
|
| (1.01) |
| 4.12 |
| 0.28 |
| 0.83 |
|
|
| |
Total
from investment operations |
1.24 |
|
| (1.04) |
|
| (1.07) |
| 4.09 |
| 0.27 |
| 0.83 |
|
|
| |
Less
distributions from: |
|
|
|
|
|
|
|
|
|
| |
Net
investment income |
— |
|
| — |
|
| (1.89) |
| (1.16) |
| (1.23) |
| (1.64) |
|
|
| |
Net
realized gain |
— |
|
| (0.60) |
|
| — |
| — |
| — |
| — |
|
|
| |
Return
of capital |
— |
|
| — |
|
(6) |
— |
| — |
| — |
| — |
|
|
| |
Total
distributions |
— |
|
| (0.60) |
|
| (1.89) |
| (1.16) |
| (1.23) |
| (1.64) |
|
|
| |
NET
ASSET VALUE, END OF PERIOD |
$ |
6.73 |
|
| $ |
5.49 |
|
| $ |
7.13 |
| $ |
10.09 |
| $ |
7.16 |
| $ |
8.12 |
|
|
| |
TOTAL
RETURN(3)(5) |
22.59 |
% |
| (14.59) |
% |
| (14.80) |
% |
60.55 |
% |
2.40 |
% |
12.85 |
% |
|
| |
SUPPLEMENTAL
DATA AND RATIOS: |
|
|
|
|
|
|
|
|
|
| |
Net
assets, end of period (in 000’s) |
$ |
14,390 |
|
| $ |
17,248 |
|
| $ |
26,178 |
| $ |
28,590 |
| $ |
18,045 |
| $ |
23,167 |
|
|
| |
Ratio
of expenses to average net assets: |
|
|
|
|
|
|
|
|
|
| |
Before
expense reimbursement/recoupment(4) |
1.62 |
% |
(7) |
1.71 |
% |
(7) |
1.54 |
% |
1.58 |
% |
1.68 |
% |
1.44 |
% |
|
| |
After
expense reimbursement/recoupment(4) |
0.85 |
% |
(7) |
0.85 |
% |
(7) |
0.85 |
% |
0.85 |
% |
0.85 |
% |
0.85 |
% |
|
| |
Ratio
of net investment income (loss) to average net assets: |
|
|
|
|
|
|
|
|
|
| |
After
expense reimbursement/recoupment(4) |
(0.14) |
% |
| (0.20) |
% |
| (0.59) |
% |
(0.31) |
% |
(0.16) |
% |
0.02 |
% |
|
| |
Portfolio
turnover rate(3) |
42 |
% |
| 49 |
% |
| 38 |
% |
66 |
% |
58 |
% |
51 |
% |
|
| |
(1)Prior
to August 8, 2022, the Institutional Class was known as
Class I.
(2)Calculated
using the average shares outstanding method.
(3)Not
annualized for periods less than one year.
(4)Annualized
for periods less than one year.
(5)Total
return is calculated assuming a purchase of shares on the first day and a sale
of shares on the last day of each period reported and includes reinvestments of
dividends and distributions, if any. If the Adviser had not waived
fees/reimbursed expenses, the total return would have been lower.
(6)Amount
is less than $0.005 per share.
(7)Ratio
excludes any expenses not included under the expense cap of the Fund including
interest expense which amounts to less than 0.005%.
(8)For
the period May 1, 2023 through December 31, 2023. On November 1,
2023 the Tran Sustainable Focus Fund changed its fiscal year end from
April 30 to December 31.
CROMWELL
FORESIGHT GLOBAL SUSTAINABLE INFRASTRUCTURE FUND — INSTITUTIONAL
CLASS
|
|
|
|
| |
For
a Fund share outstanding throughout the period |
|
PER
SHARE DATA: |
Period
Ended December 31, 2023(5) |
Net
asset value, beginning of period |
$20.00 |
|
Investment
operations: |
|
Net
investment income (loss)(1) |
0.44 |
|
Net
realized and unrealized gain (loss) on investments |
(1.77) |
|
Total
from investment operations |
(1.33) |
|
Less
distributions from: |
|
Net
investment income |
(0.46) |
|
Total
distributions |
(0.46) |
|
NET
ASSET VALUE, END OF PERIOD |
$18.21 |
|
TOTAL
RETURN(2)(4) |
(6.65) |
% |
SUPPLEMENTAL
DATA AND RATIOS: |
|
Net
assets, end of period (in 000’s) |
$45,690 |
|
Ratio
of expenses to average net assets: |
|
Before
expense reimbursement/recoupment(3)(6) |
1.37 |
% |
After
expense reimbursement/recoupment(3)(6) |
1.05 |
% |
Ratio
of net investment income (loss) to average net assets: |
|
| |
After
expense reimbursement/recoupment(3) |
2.66 |
% |
Portfolio
turnover rate(2) |
20 |
% |
(1)Calculated
using the average shares outstanding method.
(2)Not
annualized for periods less than one year.
(3)Annualized
for periods less than one year.
(4)Total
return is calculated assuming a purchase of shares on the first day and a sale
of shares on the last day of each period reported and includes reinvestments of
dividends and distributions, if any.
(5)Since
commencement of operations on January 31, 2023.
(6)Ratio
excludes any expenses not included under the expense cap of the Fund including
interest expense which amounts to less than 0.005%.
CROMWELL
GREENSPRING MID CAP FUND — INSTITUTIONAL CLASS(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
For
a Fund share outstanding throughout the periods |
| Year
Ended December 31, |
PER
SHARE DATA: |
| 2023 |
| 2022 |
| 2021 |
| 2020 |
| 2019 |
|
|
| |
Net
asset value, beginning of period |
| $ |
22.19 |
|
| $ |
26.27 |
|
| $ |
22.36 |
|
| $ |
22.13 |
|
| $ |
19.77 |
|
|
|
| |
Investment
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net
investment income (loss)(2) |
| 0.19 |
|
| 0.26 |
|
| 0.10 |
|
| 0.30 |
|
| 0.30 |
|
|
|
| |
Net
realized and unrealized gain (loss) on investments |
| 2.36 |
|
| (2.55) |
|
| 5.83 |
|
| 0.47 |
|
| 3.80 |
|
|
|
| |
Total
from investment operations |
| 2.55 |
|
| (2.29) |
|
| 5.93 |
|
| 0.77 |
|
| 4.10 |
|
|
|
| |
Less
distributions from: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net
investment income |
| (0.21) |
|
| (0.28) |
|
| (0.11) |
|
| (0.33) |
|
| (0.35) |
|
|
|
| |
Net
realized gains |
| (1.37) |
|
| (1.51) |
|
| (1.91) |
|
| (0.21) |
|
| (1.39) |
|
|
|
| |
Total
distributions |
| (1.58) |
|
| (1.79) |
|
| (2.02) |
|
| (0.54) |
|
| (1.74) |
|
|
|
| |
NET
ASSET VALUE, END OF PERIOD |
| $ |
23.16 |
|
| $ |
22.19 |
|
| $ |
26.27 |
|
| $ |
22.36 |
|
| $ |
22.13 |
|
|
|
| |
TOTAL
RETURN(3) |
| 11.95 |
% |
| (8.67) |
% |
| 26.83 |
% |
| 3.78 |
% |
| 20.86 |
% |
|
|
| |
SUPPLEMENTAL
DATA AND RATIOS: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net
assets, end of period (in 000's) |
| $ |
119,499 |
|
| $ |
135,900 |
|
| $ |
172,800 |
|
| $ |
138,700 |
|
| $ |
192,200 |
|
|
|
| |
Ratio
of expenses to average net assets: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Before
expense reimbursement/recoupment |
| 1.14 |
% |
| 1.09 |
% |
| 1.07 |
% |
| 1.12 |
% |
| 1.04 |
% |
|
|
| |
After
expense reimbursement/recoupment |
| 1.14 |
% |
| 1.09 |
% |
| 1.07 |
% |
| 1.12 |
% |
| 1.04 |
% |
|
|
| |
Ratio
of net investment income (loss) to average net assets: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
After
expense reimbursement/recoupment |
| 0.86 |
% |
| 1.06 |
% |
| 0.40 |
% |
| 1.45 |
% |
| 1.29 |
% |
|
|
| |
Portfolio
turnover rate |
| 18 |
% |
| 11 |
% |
| 29 |
% |
| 31 |
% |
| 13 |
% |
|
|
| |
(1)Prior
to August 14, 2023, the Fund consisted of one class.
(2)Calculated
using the average shares outstanding method.
(3)Total
return is calculated assuming a purchase of shares on the first day and a sale
of shares on the last day of each period reported and includes reinvestments of
dividends and distributions, if any. If the Adviser had not waived
fees/reimbursed expenses, the total return would have been lower.
Each
Fund collects non-public personal information about you from the following
sources:
•information
the Funds’ receives about you on applications or other forms;
•information
you give the Funds’ orally; and/or
•information
about your transactions with the Funds’ or others.
Each
Fund does not disclose any non-public personal information about its
shareholders or former shareholders without the shareholder’s authorization,
except as permitted by law or in response to inquiries from governmental
authorities. Each Fund may share information with affiliated parties and
unaffiliated third parties with whom it has contracts for servicing each Fund.
Each Fund will provide unaffiliated third parties with only the information
necessary to carry out its assigned responsibility. All shareholder records will
be disposed of in accordance with applicable law. Each Fund maintains physical,
electronic and procedural safeguards to protect your non-public personal
information and requires third parties to treat your non-public personal
information with the same high degree of confidentiality.
In
the event that you hold shares of a Fund through a financial intermediary,
including, but not limited to, a broker-dealer, bank or trust company, the
privacy policy of your financial intermediary
governs
how your non-public personal information is shared with unaffiliated third
parties.
Investment
Adviser
Cromwell
Investment Advisors, LLC
810 Gleneagles
Court, Suite 106
Baltimore,
Maryland 21286
Independent
Registered Public Accounting Firm
Cohen
& Company, Ltd.
1835
Market Street, Suite 310
Philadelphia,
Pennsylvania 19103
Legal
Counsel
Stradley
Ronon Stevens & Young LLP
2005
Market Street, Suite 2600
Philadelphia,
Pennsylvania 19103
Custodian
U.S.
Bank National Association
Custody
Operations
1555
North River Center Drive, Suite 302
Milwaukee,
Wisconsin 53212
Transfer
Agent, Fund Accountant and Fund Administrator
U.S.
Bank Global Fund Services
615
East Michigan Street
Milwaukee,
Wisconsin 53202
Distributor
Foreside
Fund Services, LLC
Three
Canal Plaza, Suite 100
Portland,
Maine 04101
Cromwell
CenterSquare Real Estate Fund
Cromwell
Marketfield L/S Fund
Cromwell
Tran Sustainable Focus Fund
Cromwell
Foresight Global Sustainable Infrastructure Fund
Cromwell
Greenspring Mid Cap Fund
You
may find more information about each Fund in the following documents:
Statement
of Additional Information
Each
Fund’s SAI provides additional details about the investments and techniques of
each Fund and certain other additional information. The current SAI on file with
the SEC is incorporated into this Prospectus by reference. This means that each
Fund’s SAI is legally considered a part of this Prospectus even though it is not
physically within this Prospectus.
Annual
and Semi-Annual Reports
Additional
information about the Funds’ investments is available in the Funds’ annual and
semi-annual reports and in Form N-CSR. In the Funds’ annual report, you will
find a discussion of the market conditions and investment strategies that
affected the Funds’ performance during each Fund’s last fiscal year. In Form
N-CSR, you will find the Funds’ annual and semi-annual financial statements.
You
may obtain a free copy of these documents, request other information or make
general inquiries about each Fund by calling each Fund at 1-855-625-7333
(toll-free), by visiting www.thecromwellfunds.com
or
by writing to:
CROMWELL
FUNDS
c/o
U.S. Bank Global Fund Services
P.O.
Box 701
Milwaukee,
WI 53201-0701
Shareholder
reports and other information about each Fund are also available:
•free
of charge from the SEC’s EDGAR database on the SEC’s website at
http://www.sec.gov; or
•for
a fee, by electronic request at the following e-mail address:
[email protected].
_______________________________________________
(The
Trust’s SEC Investment Company Act of 1940 file number is
811-23724.)